Following last week’s news that Coinbase became the first major cryptocurrency company to be publicly traded on the Nasdaq in the United States, Business Leader got the views of industry experts on what it will mean for investors and wider crypto sector.
Bitcoin investors must expect more government scrutiny of crypto
Bitcoin investors should be braced for – but not put off by – ‘much greater government scrutiny’, warns the boss of one of the world’s largest independent financial advisory and fintech organisations. The warning from Nigel Green, CEO and founder of deVere Group.
Last Tuesday on the deVere Crypto app, Bitcoin, the world’s largest cryptocurrency by market capitalisation, hit all-time highs of $64,000.
Green says: “Coinbase’s direct listing is a truly momentous day for the cryptoverse. Should it hit its private market valuation of $100 billion, it would immediately become one of the 85 most valuable companies in the US. Of course, this is driven by the fact the world’s two biggest cryptocurrencies, Bitcoin and Ethereum, to which Coinbase is intrinsically linked, have risen 800% and 1,300% respectively over the last year.
But with these astronomical price jumps, and as they become increasingly embedded in the global financial system, and, critically, as the direct listing on the Nasdaq will reach a wider investment base other than the usual crypto evangelists, investors must expect much greater government scrutiny.
“Governments, central banks and regulators will be keen to protect the currency status quo. We should expect considerably higher levels of regulation in the crypto market. Indeed, I believe it is inevitable.
“However, Bitcoin investors shouldn’t be put off by the likelihood of greater government scrutiny. Major draconian clampdowns are unlikely as digital currencies are increasingly regarded as the future of money – even by traditionalists. They can’t put the genie back in the bottle.
“Indeed, proportionate regulation should be embraced. It would help protect investors, shore-up the market, tackle criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.
“The Coinbase IPO underscores that cryptocurrencies in some form or another are here to stay – and the market is only set to grow. Because of this, investors should know that regulation will become a greater priority.”
The IPO will result in new types of investors
Asen Kostadinov, Strategy Manager at London crypto custody provider Copper shared his thoughts.
The Coinbase IPO could well serve as a gateway drug to crypto. Arguably, this is the most important IPO in crypto to date. Coinbase is a credible, regulated, profitable blue-chip tech stock, which is also a pure-play crypto company. As such, it will be a likely holding for every tech investor/ETF fund and it will also be the best crypto market proxy investors have had.
The IPO will result in new types of investors entering the crypto space, some of whom will recognise the benefit of owning crypto assets directly, compared with through a proxy.
Institutional adoption of crypto has clearly gone through a major inflection point since the last quarter of 2020 which speaks to the maturity and credibility of the space. The growth the sector has experienced over the past year is a lot more sustainable than in 2017.
The indicators are that this bull market has further to go and we are not at the top yet with such strong liquidity, transactions at a record high and institutions buying as much as they presently are.
Does Coinbase going public point to wider blockchain adoption?
The recent weeks saw blockchain technology move another few steps closer towards broader adoption with Coinbase shooting above a $112bn valuation in the trading debut last Wednesday and the recently-launched PayPal’s ‘Checkout with crypto’ service. Rather than crashing hard, as some observers predicted, digital assets appear to be making a fundamental shift in the world of finance. The question many might be asking — what’s next? Vytautas Zabulis, CEO of H-Finance explains.
The cryptocurrency exchange platform’s Coinbase IPO debut, which took place on Wednesday, marks it as the first company of its kind to go for public trading. As the exchange platform tokens were seen getting a significant boost prior to the public announcement, many expected it to attract a number of institutional and corporate investors, who support crypto, showing a long-haul buy-in, while potentially setting an example for other crypto entities to go public.
“It’s been phenomenal to see how the digital asset world has been shifting into traditional finance and be in the middle of it,” says Vytautas Zabulis, CEO of H-Finance, a company offering regulator-compliant digital asset trading solutions.
“These ongoing shifts show that digital assets are confidently moving away from being considered a niche asset class, becoming a part of mainstream finance. People, especially the younger generation, are getting involved in the trading industry, too, which only reaffirms the point.”
Right behind another impressive Bitcoin surge of over $64,800, Binance Coin (BNB) is making moves worthy of as much attention. Zabulis notes that due to higher-than-average Ethereum fees, Binance is able to pick up a lot more traction. BNB currently sees extremely high trading and transaction volumes, and the token price increased 15 times from the end of January. Binance smart chain, while it draws some criticism for not being truly decentralized, might be a real competitor to Ethereum.
With so much happening in the crypto sphere there is a growing interest by both retail and institutional investors to start playing a more active role in trading these assets. Unfortunately, getting into the subtleties of digital asset trading is not as simple for someone, who just entered the world of trading, observes Zabulis.
“Now that Coinbase went public and BNB is seeing a 1500% surge, coming right behind Ethereum, we’d been getting a lot more requests, regarding digital asset trading,” explains Mr. Zabulis. “For someone who’s new to this industry or is looking to start trading digital assets, a quick and easy-to-navigate regulated solution is key. What H-Finance offers is exactly that.”
Traditional finance and/or Fintechs could offer their customers the simplest way to trade digital assets by integrating a native API into an already-existing infrastructure—no third-party applications or new accounts needed.
Coinbase’s offering could be a potential pivotal moment for cryptocurrencies, alongside the continuing popularity of NFT trading and the exponential growth of Binance coin. As the financial world moves towards embracing digital asset trading, newcomers to the trading world look for easier solutions that would be as familiar as making transactions.
Online data shows the countries most interested in Coinbase
|Rank||Country||Average Monthly Online Searches for ‘Coinbase’|
Key findings from the Money Transfers Research:
- Americans are the most interested in Coinbase with an average 1,420,000 online searches per month for the cryptocurrency exchange platform – equivalent to an astonishing 45,805 online searches a day
- United Kingdom (325,000) and Spain (204,900) are the other countries where there are more than 200,000 online searches a month for Coinbase
- In Asia, India is the country where there are the most searches for Coinbase with an average 54,600 online searches each month
- Nigeria is the only country from Africa to feature in the top 20, as there is an average 23,000 online searches a month from Nigerians for Coinbase
- At the other end in joint 20th position is Ireland and Portugal, as there is an average 22,000 online searches every month in each of the two respective countries for Coinbase