Coinbase shares closed at $327 on the Nasdaq launch, awarding the cryptocurrency exchange a completely diluted market value of $86 billion. The cumulative number of common shares remaining and eligible for trading on the free market after the potential sources of conversion is referred to as being completely diluted. However, others argue that this calculation provides a misleading value when it involves options plus limited shares, which overstates the number of securities shown in the valuation.
In the run-up to the IPO, some experts predicted that Coinbase would be valued at $100 billion. Its final valuation was also less than what had been predicted.
Coinbase on Nasdaq is a milestone for the industry
Coinbase is the very first worldwide cryptocurrency firm to try the public market within the United States. Its IPO was therefore heralded as a true watershed moment in the mainstreaming of cryptocurrencies.
“In my view, Coinbase is indeed a foundational and vital piece of the cryptocurrency community and a good indicator for the increasing mass acceptance of Bitcoin as well as crypto throughout the near future”, according to Dan Ives.
COIN debuted on the Nasdaq Global Select Market with $381. Close to the start, buyers had managed to increase the price too as far as $429, however, bears quickly took control, causing the price to fall as the day progressed. It closed at $327 at the end of the day. Also, prior to its public debut, the company had published some remarkable numbers and had also recorded an increase in sales and twice as many monthly active users over the latest quarter.
The real valuation should be different
Although Coinbase’s completely diluted value came in at $86 billion, roughly in the centre of pre-debut predictions of $60 billion to $100 billion, Jeff Dorman, the CIO at Arca, believes this number is vastly exaggerated. Dorman blasted the media, overspreading “misinformation” with “horrible news,” claiming that these people were using the incorrect share count. The closing valuation for Coinbase, therefore, ought to be $64.7 million based on 198 million class A and B shares.
Also, in terms of touching a $100 billion valuation, researcher Larry Cermak believes that this will occur but that it is also dependant on the bull market persisting. During this stage, it is indeed unknown if an overinflated Coinbase market capitalization would be a boon or a bane for cryptocurrency. Although an exaggerated value is sure to pique curiosity, the flip side has Coinbase under added stress to live up to the expectations.