Coinbase Shares May Not Start Trading Right after Market Opens

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by Godfrey Benjamin · 3 min read
Coinbase Shares May Not Start Trading Right after Market Opens
Photo: Nasdaq / Twitter

While being applauded by many, the listing of Coinbase has been described as a “watershed event” for the global cryptocurrency industry by Wedbush Securities analyst Dan Ives.

Coinbase shares may not be readily available for trading right after the United States stock market opens by 9:30 am ET. As peculiar with companies who went public through direct listing as Coinbase is considering, agreeing on the reference point for trading to kickstart between the sellers and the buyers usually takes some time.

The public debut of Coinbase is one of the most anticipated listings thus far this year, marked because it represents the cryptocurrency trading ecosystem and industry in general. In the direct listing option, holders of the shares sell directly to new investors, at a soothing price that serves as the reference for all. As of late Tuesday, the reference point for trading the company’s shares was pegged at $250, a valuation that is close to $100 below the $343.58 price it had been trading at in the private secondary markets.

One of the early Coinbase investors, Barry Silbert, the Chief Executive Officer of Digital Currency Group said in a tweet that he will not be trading his Coinbase shares at the $250 reference price.

While Coinbase will be available for trading today, the anticipation to get them as soon as the market comes to life may have to be tempered down. Until at least, a favorable agreement is reached for the reference price.

Coinbase Listing Is a ‘Watershed Event’ for the Crypto Industry

The listing of Coinbase while being applauded by many has been described as a “watershed event” for the global cryptocurrency industry according to Wedbush Securities analyst Dan Ives.

The trading of the company’s stock on the Nasdaq bourse is “potentially a watershed event for the crypto industry and will be something the Street will be laser-focused on to gauge investor appetite,” he said.

However, many are quick to note that the close ties of the firm to the broader cryptocurrency market with Bitcoin (BTC) at the center can serve as a systemic limitation when the market tides are down. Nonetheless, the faith of those who believe Coinbase will eventually grow to become an index for all altcoins that are being built outstrips the sentiments of the critics.

Impact of Future Regulations of the Cryptocurrency Industry

The United States is at a crucial stage where crypto industry stakeholders are demanding clarity in the regulations binding the cryptocurrency ecosystem from regulators.

“Some of Coinbase’s activities (such as some of its prime brokerage services and its use of its own capital to trade) might be subject to tighter regulatory oversight in the future,” said Stéphane Renevier, an analyst at financial education platform Finimize. “Given that the regulatory landscape is evolving extremely rapidly, the company is always at risk from a change in status, which could impact some of its most profitable activities.”

The advent of these regulations which may take any form may have an impact on Coinbase’s business, and systems must be designed to accommodate them if the company must stay relevant in the space it currently dominates.

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