Why Many ETF Investors Excited About Coinbase IPO

Why Many ETF Investors Excited About Coinbase IPO

Image: Courtesy of Coinbase

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."

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.

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Disclaimer: © 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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