Coinbase's Valuation Surges 16% to $100 Billion on Nasdaq Debut

Coinbase, a prominent cryptocurrency exchange, has evolved significantly since its inception as a "PayPal for Bitcoin." The company went public four years ago with a valuation of $86 billion, which briefly surged to $100 billion, rivaling Facebook’s debut in 2012. This public debut marked a significant milestone, creating a thousand new millionaires overnight and enriching CEO Brian Armstrong by $16 billion through his 40 million Coinbase shares. Early investors, employees, and backers also cashed out billions on the first day.

Armstrong led Coinbase through various challenges, including regulatory crackdowns, fearmongering, climate hysteria, and community infighting, for nine years before its Nasdaq debut. The company emerged into a powerful bull market, with its business model centered around swapping bitcoin for US dollars. This model proved successful, as users exchanged $1 million worth of bitcoin in a single 30-day period by February 2013. Coinbase's revenues have since been positively correlated with the price of bitcoin, evolving into a full-blown trading and financial suite.

Coinbase's journey from a simple bitcoin exchange to a comprehensive financial platform highlights its adaptability and resilience. The company's initial pitch as a "PayPal for Bitcoin" had a clear expiration date, as all companies are expected to become bitcoin companies over time. This includes PayPal itself, which began rolling out crypto functionality in the months leading up to Coinbase’s direct listing. Coinbase is now working to diversify its revenues away from bitcoin trading fees, currently worth about half its April 2021 mark.

Looking ahead, more crypto companies are expected to go public in the next year or two, starting with stablecoin issuer Circle and potentially trading platform eToro. However, bitcoin does not represent the beating heart of these firms in the same way it did for Coinbase in its formative years. Coinbase's legacy in the crypto industry is a subject of debate, with some arguing that it has safeguarded the industry's bitcoin and its reputation for over a decade. Others view it as a reliable but somewhat outdated player, similar to AOL in the early days of the internet.

Coinbase's technical ambivalence towards bitcoin is evident in its anemic bitcoin investments and its focus on other cryptocurrencies like Ethereum, Solana, and other competing L1s. Despite bitcoin driving 30% of all transaction revenue last year, the company's product and development roadmap often ignores it. This has led to speculation about Coinbase's future relevance in the crypto industry, as it continues to invest in scaling blockchains and other technologies.