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Coinbase soars in market debut, valued near $86 billion
AP

Coinbase soars in market debut, valued near $86 billion

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Coinbase made a rousing debut on Wall Street Wednesday, with shares of the digital currency exchange rising as high as $429, briefly giving it a market value over $100 billion.

Coinbase Global Inc.’s initial public offering happened with cryptocurrency chatter seemingly everywhere, even at the U.S. Federal Reserve. Digital currencies are being incorporated into business plans and accepted for payment by major corporations like Tesla, PayPal and Visa.

The San Francisco-based company’s listing on a public stock exchange is seen by some as an inflection point for digital currencies, as Coinbase’s fortunes are closely tied to Bitcoin, the most popular cryptocurrency.

Bitcoin’s price topped $64,000 on Wednesday, up from $29,000 at the start of the year, and Coinbase said recently that first-quarter revenue should total around $1.8 billion, exceeding its revenue for all of 2020.

Shares of Coinbase are listed on the Nasdaq under the ticker “COIN,” and closed at $328.28, up 31% from the $250 reference price set by Nasdaq ahead of the first trade. That puts Coinbase’s market value at $85.78 billion.

That market value makes Coinbase one of the biggest publicly traded U.S. companies — just 93 companies in the S&P 500 index have a higher market value. Coinbase’s value is close to the combined market value of Nasdaq Inc., which runs the Nasdaq Stock Market, and Intercontinental Exchange, which owns the New York Stock Exchange.

Founded in 2012, Coinbase became popular among cryptocurrency fans by providing them with an easier way to exchange shares of Bitcoin and other digital currencies. Unlike many newly public companies Coinbase is profitable — the company estimates it had net income of between $730 million and $800 million in the first quarter.

Dan Ives, analyst at Wedbush Securities, said in a note Wednesday that “Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of Bitcoin and crypto for the coming years.”

Still, even as more companies warm up to digital currencies, there are many doubters. Until recently the major financial institutions avoided cryptocurrencies, and Bitcoin is still viewed more as a store of value that as a method of payment.

Even as Coinbase made its trading debut, Federal Reserve Chair Jerome Powell described cryptocurrencies as “vehicles for speculation” in comments to the Economic Club of Washington. “No one is using them for payments, for example, like the dollar.”

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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