Why Many ETF Investors Excited About Coinbase IPO

April 12, 2021 2:17 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Why Many ETF Investors Excited About Coinbase IPO

Exchange-traded funds (ETFs) investors are willing to buy into the upcoming Coinbase (COIN) IPO.

What Happened: According to CNBC, the upcoming Coinbase Nasdaq listing is expected to introduce a broad base of investors that have not yet meddled with crypto assets to this booming market.

CEO at digital asset index and beta fund provider Bitwise Asset Management Matt Hougan said that "Coinbase is going to blow people's minds," and added "I think it’s going to force traditional finance to wrestle with the phenomenal growth that is taking place in crypto. […] 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."

Christian Magoon of Amplify — the asset manager running the blockchain tradable fund Transformational Data Sharing ETF (BLOK) — also said that the firm "can buy it the moment it goes public, and we fully expect it will be in our portfolio." 

Magoon added that we "will see many more ETF firms filing for crypto-type funds."

Related content: Benzinga's Full Upcoming and Recent IPOs Calendar

Why It Matters: Coinbase reportedly counts 56 million verified users and $1.8 billion of revenue in this year's first quarter alone; all of this contributed to the company's $100 billion pre-IPO valuation.

Still, not everyone agrees with this valuation, and according to market research firm New Constructs, despite Coinbase's revenue climbing ever higher over the past 12 months, "the company has little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high expected valuation of $100 billion."

Also, CNBC points out that the Intercontinental Exchange Inc (NYSE: ICE) — which operates the New York Stock Exchange — has a market cap of $65 billion and Nasdaq only $25 billion or one-fourth of the number at which Coinbase is aiming.

Despite this, many investors are particularly excited about the upcoming offering. Senior IPO market strategist at  Renaissance Capital Matt Kennedy shared that Coinbase will be the largest "public pure-play cryptocurrency company," and added that he expects "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."

According to CNBC, Cathie Wood’s ARK Fintech Innovation ETF (ARKF) and Global X FinTech ETF (FINX) will also buy into Coinbase.

Image: Courtesy of Coinbase

Related Articles

Digital Asset Custody Solutions: Should You Build Or Buy? | Opinion

This column does not necessarily reflect the opinion of the editorial board of Benzinga. Banks and governments have had centuries to improve the quick transfer of traditional currency.  read more

Palantir Stages Reversal Following 'Phenomenal' Earnings Report, Says Roger Monteforte

The volatile price action in Palantir Technologies Inc (NYSE: PLTR) was less about the Bitcoin (CRYPTO:BTC) news and more about the company's fantastic earnings report, founder and CEO of Forte Capital Group Roger Monteforte said Tuesday on CNBC's "Closing Bell.&qu read more

MoneyGram Will Allow To Buy And Sell Bitcoin With Cash In Partnership With Coinme Exchange

Cross-border payments giant MoneyGram International Inc. (NASDAQ: MGI) will now allow its customers to buy Bitcoin (CRYPTO: BTC) and other cryptocurrencies for cash at brick-and-mortar locations in the United States. read more

He Invested $17 In Shiba Inu. Now He Has Almost $6M

“Dog meme tokens” have captured the attention of crypto market participants – most recently Shiba Inu token (SHIB) took the spotlight after gaining 1479% in seven days. What's even more impressive is the token’s overall returns to early holders who purchased SHIB in October 2020. read more