Last Updated: April 17, 2021
The public listing for Coinbase is going to have a huge effect on cryptocurrency acceptance, adoption and regulation around the world. The American based trading platform started trading its shares at $381 halfway through the week, which makes it the biggest direct listing in history. As a result, exchanges everywhere were playing close attention to the events unfolding.
“Everyone is watching this IPO – the direct listing precisely. Its implication is more than a pure IPO, but for the first time a crypto exchange (is) to be listed publicly.” Said Lennix Lai, the Financial Markets director at OKEx, explained in a written statement.
Joel Edgerton, director of bitFlyer based in Japan, says that he sees the Coinbase debut as a hallmark for the cryptocurrency industry that is potentially going to set the pace for other regions to start accepting cryptocurrency on a larger scale.
Co-founder of Huobi group Du Jun says that, “As one of the most widely recognized crypto brands in the West, Coinbase’s IPO underscores a major shift in the global financial infrastructure as more and more people embrace digital assets. We’ve seen this shift accelerate in many of the markets we serve, but this moment marks the dawn of mainstream crypto adoption.”
Financials for Coinbase can now be seen by the public, which means that there is a bigger chance of bringing investors to cryptocurrency.
Konstantin Anissimov, executive director of CEX.IO based in the UK, said, “We’ll see an influx of former bankers, consultants and entrepreneurs trying to build in this space.” The assurance of an open like this is going to help with the decision for consultants and bankers in the future to invest in cryptocurrency, especially when it comes to choosing future careers.
Anissimov continued by saying, “Entrepreneurs are often inspired by good stories of creating something larger than themselves. Coinbase, certainly, can serve (as) an example of that.”
The public offering is certain to get the attention of institutional investors which will definitely push the industry forward. Digital assets are soon going to become an integral part of everyone’s investment portfolio, similar to bonds, gold and alternative assets.
However, Coinbase might still have to fight the fight against platforms that are more decentralized that let their clients conduct peer-to-peer trades without needing a middleman.
Vitaliy Kedyk, head of strategy at Currency.com, says, “Centralized exchanges like Coinbase are in an interesting position. They are bringing awareness to the decentralized economy and acting as a gateway for the general public to enter this new and emerging space. So, it will be interesting to see how Coinbase fares against DEXs going forward.”
Regulating the Industry
Jun from Huobi predicts the fuss around the listing for Coinbase that is going to encourage regulators everywhere to become more interested in virtual assets, which he thinks is going to add to the industry as a whole. Jun explains, “A move toward a more standardized and defined regulatory landscape will make it easier for exchanges like ours to provide users with a safe, secure and reliable trading experience and ensure the industry’s long-term sustainability.”
Lai talked about how the acceptance with institutions seen through a public listing like this means a huge amount to regulators, and it might be a great gateway for other countries out there to allow cryptocurrency platforms to go public on their respective exchanges, like Singapore and Hong Kong.
Anissimov says, “this is a qualitative shift, demonstrating the acceptance of a crypto player in the traditional finance territory. Big validation point!”
He also thinks that because Coinbase is now going to be vulnerable to public skepticism, it is going to set a new ‘standard of behavior’ for industry participants who might also have dreams of taking their exchanges public at some point in the future.
Anissimov said, “given the standards publicly traded companies are held to, the higher standards will transpire to the crypto industry at large.”
First of Numerous Exchanges
There are a lot of other cryptocurrency exchanges out there that are hoping to follow in the footsteps of Coinbase. CEO of Crypto.com Kris Marszalek says that he is keeping an eye on what cryptocurrencies are doing, because Coinbase’s public debut is going to be a good reference point for Crypto.com’s valuation.
Marszalek says “For reference, while Coinbase has approximately five (times) more users than Crypto.com, we are growing faster and are looking to largely close this gap in the next 18-24 months.”
A lot of exchange platforms on the market could be listed at least on regional stock exchanges, including Japan, South Korea, and Europe with the likes of Bithump, bitFlyer, and Kraken respectively. Lai said, “However, there should be standards in place similar to those applied to Coinbase, especially on the listing requirements, the audit statements, and everything related to cyrpto exchanges.”
He assumes that the next exchange for cryptocurrency is going to be in America again, as Coinbase has set the precedent over there. He says, “So, I think moving forward other exchanges would consider investing in the U.S. first and then other global markets.”