(Bloomberg) --
Coinbase Global Inc.’s highly anticipated direct listing had touched off a frenzy in demand for all things crypto. A tumble shortly after its debut dented the euphoria.
Bitcoin pulled back from an all-time high as the biggest U.S. crypto exchange tumbled to close down 14%. It opened at $381 a share in its direct listing shortly before 1:30 p.m. in New York and spiked as high as $429 in the first 10 minutes of trading before turning lower. It closed at $328.28. Bitcoin fell to its session low when Coinbase turned, before paring losses. It was trading around $63,160 as of 8:12 a.m. in Hong Kong.
The listing is seen pushing crypto even more into the mainstream of investing, exposing legions of potential buyers to digital tokens, which have grown into a $2 trillion industry in little more than a decade. Bitcoin, the original and biggest crypto coin, is d at more than $1 trillion alone after a more than 800% surge in the past year.
At the closing price, Coinbase’s valuation on a fully diluted basis is about $86 billion. Given its size and visibility, Coinbase is likely to be popular with actively managed equity funds, particularly growth managers, essentially making a large swath of stock holders passive investors in crypto.
“It’s a huge step forward for the industry and the legitimacy it brings in the eyes of investors and regulators,” Mati Greenspan, founder of Quantum Economics, said on Bloomberg TV.
Growing mainstream acceptance of cryptocurrencies has spurred Bitcoin to a 120% rally since December, as well as lifting other tokens to record highs. That’s despite lingering concerns over their volatility and usefulness as a method of payment. Attention from regulators is poised to intensify as Coinbase becomes a public company.
“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,” said Nigel Green, CEO and founder of deVere Group.
©2021 Bloomberg L.P.
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