what is Coinbase IPO? When a company can enter the stock market in accordance with the rules of the stock exchange organization, it must offer its shares for the first time. The first day that a company’s stock is offered to the public on the stock exchange is called an Initial Public Offering. In other words, it is called an IPO.
What is the difference between IPO and ICO?
IPO belongs to reputable and well-known companies, however, an ICO or Initial Coin Offering may be a high-risk personal project. The purpose of holding an ICO is to raise the initial capital of the project and it is done by start-up companies. If an IPO is held when a company has achieved economic stability and is conducted solely for public expansion. One of the prerequisites for holding an IPO is that companies have a certification of revenue history by a professional auditing firm. While in the ICO process, projects only have white paper, which is not mandatory.
Holding IPO of Coinbase exchange
Coinbase Exchange was established in 2012 in San Francisco. The exchange is a global digital asset exchange company that provides users with a place to buy and sell digital currencies. The company increased its assets under management from $35 billion in 2020 to $90 billion in early 2022.
In April 2021, Coinbase Exchange shares were listed on the Nasdaq Stock Exchange. Following a successful year with more than $1.8 billion in trading revenue, the business information center examined possible upside or downside market scenarios for the initial public offering of Coinbase.
Throughout history, the market has witnessed many fundraising events, such as the ICO and the IEO. However, the entry of IPOs into the digital currency market is a significant development that cannot be achieved by any exchange other than Coinbase. This exchange is one of the largest exchanges in the digital currency industry.
There is a term called “Coinbase Effect” which indicates a significant increase in the value of assets immediately after being listed on the Coinbase Asset List, which can affect not only the stock price but the entire market.
Holding a Coinbase IPO is a justifiable approach. Considering that people like Morgan Stanley, Goldman Sachs, Blackrock and others invest in it, believing that Bitcoin is a tool to maintain financial value. Coinbase also sees this as an important first step in creating a legal and reliable interface between decentralized and traditional financial markets, which could attract large numbers of investors waiting for such a transformation to ensure the dynamism of the cryptocurrency market and digital currencies. To attract.
Rising Bitcoin prices over the past few months have increased Coinbase capital more than eightfold. As was the case with similar examples such as Tesla, the presence of Bitcoin as an asset in a company’s financial balance sheets is a reliable way to raise capital and attract investors, which can ultimately increase the company’s capital and market share value.
Potential impact on the cryptocurrency market
Coin base’s IPO can have both positive and negative effects on the digital currency market as this company has a fundamental position in the industry. Therefore, any oscillation that occurs can have a significant impact on other items based on which it is made.
A positive scenario that can be considered with the successful start of the IPO is that the price of the main digital currencies will increase, as a result of increasing the level of investor confidence and the entry of new players into the field who want to invest and participate in the crypto market.
However, there is a negative scenario that could increase the caution of ordinary investors. Another possibility may be related to the uncertainty of the amount of participation in the initial public offering and its subsequent consequences. As seen in the initial public offering of Facebook shares, the turnout was very high on the first day, yet the stock price fell the next day as public excitement subsided.
If it seems to small investors that it will be difficult for Coinbase to enter the traditional trading market, the same thing could happen to Facebook for Coins.
The results will be disappointing for digital currency audiences, leading to a significant drop in the price of cryptocurrencies that were pre-purchased in hopes of rising prices.
Coinbase IPO Price Prediction
A year ago Coinbase sent a draft to the Securities and Exchange Commission (SEC) to prepare the ground for the IPO of the digital currency exchange. One of the most anticipated initial public offerings of the cryptocurrency is one step closer to being finalized. The company has sent a draft of its IPO to the US Securities and Exchange Commission (SEC).
Coinbase began trading on April 14, 2021 at $381 a share, a 52 percent increase over a $250 reference price set by NASDAQ. A price reference set by a stock exchange on the basis of expectations for where the stock will open.
The stock swung as low as $310 and as high as $429 in a volatile day of trading that reflected the unpredictable nature of cryptocurrency prices. Coinbase ended the day at $328.28, valuing the company at $85.7 billion counting all of its outstanding shares — more than 10 times its last valuation as a private company.
Although the Coinbase IPO is a turning point in the digital currency industry, there are also threats that stock sales could trigger major price hikes or lead to a blow that undermines investor confidence in digital assets, which has recently seen relative growth.
Whichever of these scenarios is implemented, it is likely that Coin base will win the game since it has been able to establish himself in the traditional financial market.