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Investors Say Coinbase Listing Will Cause Explosion in Crypto Investing

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The pending Coinbase Nasdaq direct listing, scheduled for Wednesday is exciting a broad base of the investment community outside the usual cryptocurrency crowd.

Coinbase is going to blow people’s minds, said Matt Hougan, chief investment officer at Bitwise Asset Management, which pioneered the first cryptocurrency index fund. “I think it’s going to force traditional finance to wrestle with the phenomenal growth that is taking place in crypto.”

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It’s not hard to see that phenomenal growth when Bitcoin is up over 700% YTD. Coinbase is likely the biggest beneficiary of the cryptocurrency revival as it had 56 million verified users, with $1.8 billion in revenues in the first quarter alone! I've written about valuation before and that could be anywhere from $50 billion to $100 billion, but we will see on Wednesday where that number falls once trading starts. To put this in perspective the Intercontinental Exchange, which runs the New York Stock Exchange, has a market cap of $65 billion, while Nasdaq has a market cap of $25 billion. Coinbase could be valued more than both those exchanges combined. That kind of valuation is getting the investment community very excited.

Crypto assets have had the same problem that other hot commodities (like pot, SPACS or space) have had in the past. It's all about supply and demand. There is a high degree of interest with a notable lack of investible assets. Coinbase, however, will go a long way toward solving that problem.

Coinbase will be the biggest public pure-play cryptocurrency company, full stop, said Matt Kennedy, senior IPO market strategist at Renaissance Capital, which runs the Renaissance Capital IPO ETF (IPO). I expect every crypto ETF will want (or need) to own it at some point, and it is possible our ETF will be the first to own it.

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It’s the same story with Christian Magoon of Amplify, who runs the Transformational Data Sharing ETF (BLOK), which focuses on blockchain technology. Being actively managed, we can buy it the moment it goes public, and we fully expect it will be in our portfolio, said Magoon

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I also think other tech ETFs like Cathie Wood’s ARK Fintech Innovation ETF (ARKF)and Global X FinTech ETF (FINX), will also likely be buyers, and that is just the beginning. Many investors will want to get exposure which means they might be lightening up on other hot areas so look out for some money movement on Wednesday.

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The best part of all of this is the ownership of crypto by individuals and institutions is still fairly low so maybe the valuation of Coinbase will encourage more private entities to go public and retail investors to directly invest into actual coins. I think we’re going to see a 'gold rush' for crypto equities as investors realize just how fast the ‘picks and shovels’ companies of the crypto ecosystem are growing. Those of us that are early adopters willbenefit from the rush.

The Coinbase listing will break down barriers because this will have to be approved by a traditional financial regulators, ensuring transparency, integrity and disclosure which means more players are coming. Are you ready?

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