Coinbase’s $86 Billion Public Debut | A Crypto-Friendly SEC

DEBUTANTE BALL

On Wednesday, industry headliner Coinbase finally made its public debut with the largest direct listing in history . While Coinbase is not the first crypto firm to go public or trade on a major exchange such as Nasdaq, the listing had been seen as a watershed moment for the industry. Listed under the ticker COIN, shares started trading on the Nasdaq exchange at about 1:30 p.m. EDT Wednesday and immediately surged to a price of more than $398, eclipsing the $250 reference price set on Tuesday. Coinbase shares closed at a price of roughly $328, up 31% from the reference price and giving Coinbase a market capitalization of about $86 billion. On Friday, COIN closed at $342 per share.

However, now the really hard work for Coinbase begins. The nine-year-old company is facing growing threats to its outsized profits, including competition from brokerages increasingly expanding their crypto service offerings, bitcoin ETFs waiting for approval by the SEC, shrinking fees and, of course, volatility of the broader market.

ENTER GARY GENSLER

On Wednesday was a big day for the cryptocurrency industry for one more reason. The Senate confirmed President Joe Biden's nomination of Gary Gensler, a former Goldman Sachs banker and MIT professor who used to lecture on crypto and blockchain, to lead the Securities and Exchange Commission. Viewed as a leading reformer after the 2008 financial crisis, Gensler opened his nomination hearing in March by touting his five-year stint as chair of the Commodity Futures Trading Commission and cautioning that “when we fail to root out wrongdoing or to adapt to new technologies or to really understand novel financial instruments, things can go very wrong.” With a promise to increase transparency and reduce risk in the market, he succeeds former SEC Chair Jay Clayton, who was not seen as overly friendly to the crypto industry.

The new SEC chair will have his hands full with key issues of the moment other than cryptocurrency, including ESG investing, order routing and a fiduciary standard for brokers. That said, one particular hope in the industry is that he will accelerate the adoption of SEC Commissioner Hester Peirce’s Token Safe Harbor proposal,  which was reintroduced this week.

MORE BITCOIN ON BALANCE SHEETS?

For the third year in a row, our Blockchain 50 Symposium on Tuesday celebrated billion-dollar companies using the technology behind bitcoin to improve their businesses. This year’s headliners included PayPal CEO Dan Schulman and MicroStrategy’s boss Michael Saylor as well a dozen of executives from Visa, Onyx by JPMorgan, Fidelity and LVMH, among others.

Importantly, Dan Schulman predicted that PayPal’s recently launched “Checkout With Crypto” service, which encourages purchases with bitcoin, ether and other cryptocurrencies, will easily reach $200 million transaction volume within months. Despite this enthusiastic forecast, Schulman said PayPal is unlikely to put bitcoin on its balance sheet this year, citing volatility concerns from investors. Notably, shortly after Schulman’s remark, an event poll showed 26% of respondents expect their companies to buy bitcoin this year (more than 500 people answered).

BLOCKCHAIN 50 SPOTLIGHT

The South African pulp producer Sappi has partnered with Indian eco-friendly fabric maker Birla Cellulose on GreenTrack, a blockchain that tracks fabric products from sustainable forests to pulp to manufacturing plants. More than 250 supply chain partners, including Walmart and Marks & Spencer, now use GreenTrack to verify the sustainability of the apparel they sell.

ELSEWHERE

 
Bitcoin tumbles after Turkey bans crypto payments citing risks [Reuters]

Digital Artist Pak Sells NFT Works for $17 Million at Sotheby’s
[The Wall Street Journal]

Dogecoin spikes 300% in a week, stoking fears of a cryptocurrency bubble [CNBC]

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