Yesterday, Coinbase did its direct listing on the NASDAQ and outperformed expectations. Coinbase went to the market at a reference price of $250 but quickly rose to $429. This saw its market value rise to over $100 billion. The massive price rally also triggered an increase in the price of Bitcoin hitting a high of $64k within the listing period.
At the end of the trading session, Coinbase closed at $328, giving it a valuation of $85 billion. This was close to the $90 billion valuations that private sales had calculated for the company. The higher price of the asset is an indicator of the strong bullish momentum in the market.
Nonetheless, there are concerns about the company’s revenues, mainly because they are primarily derived from transaction fees. In an interview with Squawky Box of CNBC, the company’s CEO Brian Armstrong was taken to task about how more than 96% of its revenues come from transaction fees.
To this, Brian Armstrong stated that the company was in the process of diversifying its revenue stream. In specifics, he stated that the company was monetizing a number of its products to generate more sustainable revenue. He added that non-fee related revenue streams would account for more than 50% of total revenues by actualising these plans.
Whether this happens in the short-term or not, Coinbase is minting wealth at astronomical rates presently. One of the company’s early investors, Garry Tan, has managed to turn an initial investment of $300k into $2.4 billion. Many other early investors have made considerable wealth now that the crypto exchange firm has gone public.