Coinbase Debut Tumbles as Jitters Overshadow Investor Optimism

Coinbase had a volatile trading session on Thursday as investors struggle to place a value on the biggest US cryptocurrency exchange.

Coinbase was the most actively traded company among companies with a market value above $25 billion. Thursday saw $40 million shares traded, with the share price initially spiked as much as 6.4% but closed down 1.7% to $323.75.

The volatile debut can be constituted by the company’s direct listing. Direct listing as opposed to a traditional IPO where new shares are created by the underwriters and sold to the public, direct listing sees no new shares created and only the existing shares are sold with no underwriters. The current valuation of $64 billion is still far cry from its $112 billion hit debut.

Despite Coinbase’s choppy debut, positive sentiments are building on the stock due to the surge in cryptocurrency trading. Investment Bank, DA Davidson’s analyst raised the price target on the company to as high as $650. Moreover, Cathie Wood’s Ark Investment Management bought near $246 million worth of stocks for its funds. The potential increase in cryptocurrency‘s total market cap to beyond $2.1 trillion saw BTIG analyst initiated coverage with a buy rating. 

Coinbase’s valuation should present open-ended growth opportunities as a market leader similar to Tesla Inc., Snowflake Inc., and Zoom Video Communications Inc. 

According to VandaTrack, retail traders have shown interest with a net purchase of $57 million poured into its debut.

Read more on Bitcoin Trends

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