The countdown begins: What does Coinbase's direct listing mean for the crypto industry?

Coinbase will go public directly on the Nasdaq stock exchange on April 14. With valuations ranging from $20 billion to $230 billion, there is much speculation about how Wall Street will view the company. Regardless, a successful Coinbase listing would bring greater exposure, mainstream interest, and more realistic valuations to the cryptocurrency industry.

When Coinbase begins trading on Wednesday, April 14 at 9am EST, the cryptocurrency world will reach a major milestone: the first cryptocurrency company will have successfully gone public. As the leading exchange for US traders, Coinbase has already solidified itself as the “Robinhood” of the crypto world and the go-to exchange for every new investor due to its awareness, security, and products it offers. As a result, the company’s valuation has become incredibly high, sometimes as high as $230 billion, close to the market value of US telecommunications company AT&T, which is $266 billion.

Many investors believe that Coinbase’s market cap is ridiculously high, and they may be right. Recently, technology companies have come to market with high valuations, only to fall sharply just weeks after going public. For example, Uber’s stock price fell 8% on its first day of trading. Additionally, Peloton’s stock fell 11% on its first day of trading on the Nasdaq. The fact that Coinbase is solely focused on cryptocurrencies only helps support the argument that its valuation (like the entire cryptocurrency market) is driven by unfounded speculation and does not reflect the current state of the business.

On the other hand, some investors believe Coinbase will become the "Amazon of crypto." They already have the largest market coverage in the United States, and they continue to make progress overseas. In addition, they provide a business platform for businesses to accept cryptocurrencies, provide custody services for institutions interested in holding cryptocurrencies, and hold over $200 billion in cryptocurrencies on their platform. This advantage gives them a strong hand in the cryptocurrency space, and as the only publicly traded company that directly trades cryptocurrencies, their success is tied to the entire market. As they continue to innovate, their dominance will only increase, and investors will see them as a way to invest in cryptocurrencies through the company, which is less risky to Wall Street than Bitcoin itself.

If Coinbase can live up to its huge valuation expectations, the entire cryptocurrency market will win as a result. Since this centralized exchange has such a high valuation, tokens from other centralized exchanges will surge, such as Binance's BNB, FTX's FTT, KuCoin's KCS, etc. They hope to find the next Coinbase. In addition, this may also help increase the market capitalization of the entire cryptocurrency, and investors may become more aware of cryptocurrency as an investment opportunity.

On the other hand, if Coinbase were to drop significantly in value, it could have lasting effects on the rest of the market. Holders of tokens on centralized exchanges might worry that these companies are overvalued, and they would sell while they can, which would cause prices to drop significantly. This could even lead some to believe that the entire cryptocurrency market is overvalued and experiencing a price bubble. If Wall Street isn’t interested in the first cryptocurrency company, it’s easy to assume they aren’t interested in Bitcoin either.

Regardless of what happens to Coinbase's stock price, there will be positive gains for the crypto industry. First, companies and cryptocurrencies based on Coinbase will receive more realistic valuations, which will lead to less volatility in the market. Second, now every investor will have to pay attention to Coinbase. Finally, cryptocurrencies will gain more respect from mainstream investors. When a company that focuses solely on the crypto market can get a higher valuation than traditional stock exchanges, people will have to respect this business model.

In the weeks following April 14, the fate of the cryptocurrency market will rest in the hands of Coinbase. If all goes as planned and their listing is a success, it will be cause for celebration for cryptocurrency enthusiasts and a harbinger of more big companies in the cryptocurrency space to go public in the future. However, if Coinbase's stock price drops, the entire market could face significant repercussions. One thing is certain: this day will be extremely important for every cryptocurrency investor, whether they have used Coinbase or not.