One of the main events of this week was the debut of the American digital asset exchange Coinbase on the stock market. The trades opened at about $ 380, after which the price quickly rose to $ 429 and no less rapidly dropped to $ 310. The next session was not so volatile anymore, and the share price returned to normal around $ 330. At the current rate, Nasdaq estimates Coinbase’s capitalization at $ 60 billion. Before the listing, predictions were made that Coinbase could be worth $ 100 billion or more. Some experts question the validity of such estimates, given that it would make Coinbase the largest exchange in the world of all existing ones, not only in the cryptocurrency space.
“This is part of a widespread blistering fever,” said David Trainer, an analyst at research firm New Constructs. “If you do it yourself, you will no longer be able to hold these shares with a calm air.”
In the first quarter, Coinbase’s revenues grew 11 times to $ 1.8 billion, up 58% from all of 2020. For every dollar traded on its platform, Coinbase earned 0.46%. For comparison, the Nasdaq and the New York Stock Exchange have this figure of about 0.01%. Coinbase’s trading revenues were in line with Nasdaq’s three-quarter results, but trading volumes were only 2%. Trainer predicts this won’t last forever as Coinbase’s competitors continue to cut commissions while making huge profits.
Trainer’s sentiment is not shared by ARK Investment Management Katie Wood, which on Thursday invested another $ 110 million in Coinbase shares.Together with 750,000 shares ARK bought on opening day, her position size exceeded $ 350 million.
Obviously, ARK’s expectations are based on its earlier forecast, when the firm’s analysts said that one day bitcoin could “safely” bypass gold, whose capitalization exceeds $ 10 trillion. Wood herself also expressed optimism about the prospects for the approval of Bitcoin ETFs in the United States under the new administration and the arrival of Gary Gensler as head of the US Securities and Exchange Commission. So far, the company continues to build up its indirect presence in the cryptocurrency market by sacrificing a portion of Tesla shares, which nevertheless remain the largest position in its portfolio.
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