Coinbase May Be ‘Severely Undervalued’ at $77 Billion Valuation

As the Coinbase IPO draws closer, traders on Nasdaq’s private market for secondary listings are putting a big premium on the company’s valuation. According to a report from CoinDesk, the exchange is being valued at around $77 billion with shares trading […]

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key takeaways

  • Coinbase is trading on the Nasdaq Private Market at $303 per share
  • On FTX, pre-IPO contracts are trading at $380

As the Coinbase IPO draws closer, traders on Nasdaq’s private market for secondary listings are putting a big premium on the company’s valuation.

According to a report from CoinDesk, the exchange is being valued at around $77 billion with shares trading hands at $303 each. The report says that the shares were initially offered to investors for $200 each before jumping to $303 by the third week. 

Over on FTX, which offers a synthetic Pre-IPO futures contract, shares are trading just north of $380. While there are some concerns about whether the regulatory environment in the United States can support such a valuation, the market doesn’t seem to be overly concerned. While the pre-IPO contracts trade at a significant premium on FTX, the 24-hour volume is only around $20,000 as the digital asset exchange warns tokenized equities are still “highly illiquid” on the sell-side.

While a valuation of $77 billion would see Coinbase valued higher than Intercontinental Exchange, the owner of the New York Stock Exchange, some digital asset executives say that there is still room to grow. 

“Coinbase is the de-facto centralized crypto bank, as the leading exchange for both retail and institutional investors use to buy and sell bitcoin and other cryptocurrencies,” Alex Adelman, CEO of E-commerce bitcoin startup Lolli, told Blockworks. “At $77 billion, Coinbase is severely undervalued.”

“The recent increases in institutional interest and mainstream recognition of bitcoin’s practical value means that Coinbase’s value has skyrocketed,” he added. 

Daniel Polotsky, the CEO of bitcoin ATM company Coinflip, agrees and he thinks that the company’s fundamentals support a higher valuation. 

“I would expect that Coinbase trades with a valuation between $75 to $85 billion since the traders on FTX  are familiar with bitcoin and the crypto ecosystem so they might see more value than the traditional market speculators,” he said. “The Coinbase IPO is no doubt going to be one of the hottest public offerings of 2021. With the bitcoin bull market, the pandemic, and one of the hottest equity markets we’ve had, it’s the perfect storm to give Coinbase a very strong valuation.”

Coinbase has yet to announce an IPO date, but its debut comes during one of the hottest IPO markets of the past decade.

If Coinbase were go to public at a price of $303 it would be one of the largest tech IPOs by market cap, putting it above the likes of Uber, Unreal-engine marker Unity, or Bumble’s debut valuations.

In comparison, Airbnb’s blockbuster IPO back in December saw share prices surge 112% in the first day of trading, valuing the company at a market cap of just over $185 billion. Just over two months later, the stock currently has a market cap of almost $123 billion.

Bitcoin is currently trading at approximately $51,200 having passed a symbolic high of $50,000 during the Wednesday trading day on news MicroStrategy is preparing a nearly $1 billion debt offering to buy more bitcoin. 

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