Coinbase valued at $86bn in  Landmark Moment for Crypto

Cryptocurrency firm Coinbase_ which runs a top exchange for Bitcoin and other digital currency trading_ hit a market value of nearly $100bn (£72.5bn) in its stock market listing.

Shares debuted on the Nasdaq at a price of $381_ but later closed below $330. The initial valuation put Coinbase ahead of many well-known firms_ such as oil giant BP and key stock exchanges. The listing was seen as the latest step toward cryptocurrencies gaining wider acceptance among traditional investors.

The price of Bitcoin surged more than 300% last year - and has climbed even higher in 2021 - as firms including Tesla_ Mastercard and BlackRock unveiled plans to incorporate digital currencies into their businesses. It hit a record of more than $63_000 on Tuesday_ ahead of the Coinbase listing.

Less well-known digital currencies have also made gains with Dogecoin_ which was created as a joke_ rising more than 70% to more than 13 cents.

US-based Coinbase_ which makes money primarily by charging transaction fees_ has benefited from the soaring demand.

'Barometer' for crypto

Founded in 2012_ Coinbase had more than 56 million users across more than 100 countries and held some $223bn in users' assets at the end of March.

It reported $1.8bn in estimated revenue in the first three months of 2021 - more than its total for all of 2020 - as interest in Bitcoin and other digital currencies boomed.

Compared to 2018_ when investors reckoned Coinbase was worth $8bn in a private funding round_ the firm's value has increased more than ten-fold.

Wednesday's listing was set to make Coinbase co-founder and chief executive Brian Armstrong one of the wealthiest people in the world. The 38-year-old_ a former Airbnb software engineer_ owns a roughly 21% stake in the company.

For outside investors_ buying shares in Coinbase is seen as a potentially less risky way to tap into the activity in the crypto market_ without investing directly in Bitcoin or other digital currencies_ which have attracted warnings from financial regulators.

But Jane Foley_ senior currency strategist at Rabobank said tougher rules_ if enacted_ could change the outlook for Coinbase.

"There does appear to be a little bit of a slow march towards acceptability_" she said.

"There's a lot of concern that at some point the regulators_ the central banks_ might just say_ 'well_ no_' and make this a lot more difficult and at that point many people could stand to lose a lot of money."

Last year_ Coinbase's revenues hit $1.3bn_ more than double that of 2019. Profits were $322m_ compared to a loss of more than $30m in 2019.

On Wednesday_ the company's share price initially jumped_ hitting a high of nearly $430 at one point. But it later dropped back_ hitting a low of $118 before ending the trading session at roughly $328.

That would give the firm a valuation of about $86bn.