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Crypto Firm Coinbase Valued At More Than Oil Giant BP

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LAHORE MIRROR (Monitoring Desk)– Cryptocurrency firm Coinbase, which runs a top exchange for Bitcoin and other digital currency trading, has hit a market value of nearly $100bn (£72.5bn) in its stock market listing.

Shares debuted on the Nasdaq at a price of $381 apiece.

The valuation puts Coinbase ahead of many well-known firms, including oil giant BP and other trading platforms.

The listing is 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 surge in demand.

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.

Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York CityIMAGE COPYRIGHTGETTY IMAGES
image captionThe listing has made Coinbase co-founder Brian Armstrong one of the wealthiest people in the world

The company’s value has increased more than ten-fold since 2018 when investors reckoned it was worth $8bn in a private funding round.

The listing is set to make Coinbase 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 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.

“There does appear to be a little bit of a slow march towards acceptability,” said Jane Foley, senior currency strategist at Rabobank.

She added: “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.

Executives said the firm’s performance will vary amid the swings in notoriously volatile digital currencies, but over the long term it is poised for growth.

“There’s going to be volatility with new technologies and the companies associated with them. That’s ok. That’s a feature, not a bug,” Coinbase president Emily Choi told the BBC.

“If you believe in the long term idea about digital value and what crypto assets create, you’re just going to play this as a long-term thing.”

SOURCE: BBC NEWS