Finding the best crypto exchanges and possible initial public offerings (IPOs) with Nikita Zuborev, senior analyst at BestChange.
Since the start of the year, there has been talk of a Coinbase IPO, or initial public offering, with crypto enthusiasts excited about this direct listing. As the second largest cryptocurrency exchange by trading volume, there has been a lot of talk about the value of Coinbase valuation – well, launching at nearly $ 60 billion in mid-April.
Billed as the largest IPO in history, this direct listing will not only help the growth of Coinbase, but the crypto ecosystem and market as well. However, direct IPOs are primarily viewed as a short-term trading instrument, with investors and quotes experiencing “avalanche-like growth at the start of trading,” said Nikita Zuborev, chief analyst at the exchanger based in Russia, BestChange mentionned.
“We view the IPO only as an instrument for short-term speculation,” Zuberov said. “Many opportunists can participate in the first few weeks of trading, however, as a long-term instrument, Coinbase shares do not generate the same interest.
At the moment, the main source of exchange is traders’ commissions, which are determined by the volume of transactions, the attractiveness of the exchange, and the value of cryptocurrencies. Coinbase, Although it is currently an attractive and high volume trading exchange, the savage volatility of cryptocurrencies makes it difficult to predict the future income, profit and valuation of the exchange.
One of the ways to predict the future valuation of the company is the policy of paying future dividends to shareholders. According to Zuborev, Coinbase’s lack of a dividend policy structure makes it difficult to predict the company’s valuations.
“Another significant drawback when viewing the asset in long-term strategies is the company’s dividend policy – Coinbase has not paid dividends in the past and will not pay them in the future.”
A “less volatile” alternative
Coinbase also faces competition from traditional financial firms that are entering crypto such as Visa and PayPal – already listed on the NYSE and NASDAQ. These companies are more attractive for long-term investments because they also actively work with cryptocurrencies. PayPal is working on introducing crypto payments to its millions of merchant stores, Visa is introducing USDC stablecoin as a payment option, and MasterCard is moving in the same direction as well.
Plans to develop cryptocurrency divisions at Visa, MasterCard and PayPal also challenge Coinbase stock, $ COIN, as the crypto share of choice for most investors.
“A portion of investors willing to invest in the cryptocurrency industry through shares of conventional companies will go into these assets,” Zuberov believes. “Especially if we consider that their activity is diversified by traditional financial instruments, and that they are less subject to volatility and changes in the attractiveness of cryptocurrencies.”
Bitcoin ceases to be the center of gravity
Additionally, the crypto market is changing as investors move from Bitcoin (BTC) to other cryptocurrencies. As one of the leading aggregators, the BestChange analyst said that “user preference for the direction of the exchange is shifting” to decentralized finance, popular as DeFi.
End users and traders quickly learn the power of having decentralized systems and exchanges (DEX) to conduct financial transactions. According to a BestChange analyst, the company is seeing an increase in routing to DEXs as users turn to “new crypto lending systems, decentralized games, betting and forecasting systems, decentralized synthetic assets and much more. other things.”
Additionally, you cannot ignore the effect of non-fungible tokens (NFTs) on the evolution of the blockchain and crypto market.
The combination of DeFi and NFT aims to decentralize financial systems, preserve personal privacy, and consolidate ownership of corporate and government assets.
“Practically, DeFi is a symbiosis of ideas of globalization and communism implemented using high technology,” Zuberov said.
New crypto IPOs?
Coinbase is the first to party, paving the way for more crypto exchanges to seek a public listing as well. At the moment, Bermuda-based Binance (the world’s largest crypto exchange) and US-based Kraken are the exchanges most likely to launch the next crypto-focused IPO. Binance has hired Max Baucus, a former US senator from Montana and a member of the Democratic Party, as an advisor showing possible plans for an IPO.
Kraken also appears to be a possible candidate to launch the next IPO as the only major U.S. crypto firm, alongside Coinbase. After Coinbase is registered under US law, Kraken could follow the same method to obtain direct listing in the marketplace.
“Kraken is third in transaction volume, and its work from the start in US jurisdiction under all regulatory standards and rules makes the stock market the next contender for the next IPO,” Zuberov concluded.