Cryptocurrency news has been sweeping the fintech world almost nonstop this entire year, but especially over the last few weeks. Tesla CEO Elon Musk’s announcement that he was purchasing €1.2 billion in bitcoin and that Tesla would soon accept it as payment sparked companies such as Square, parent company of Cash App, Mastercard, and PayPal to make statements regarding crypto acceptance. Now, one of the largest digital currency exchanges Coinbase has announced that it has recently filed papers to become publicly traded on the stock market. This is definitely a smart move for Coinbase to be making as soon as possible since the upwards trend of cryptocurrency, and bitcoin specifically, are certainly going to encourage investors to buy stock in Coinbase. Not only that, but Coinbase is specifically requesting a direct listing, which will allow company insiders and early investors to automatically convert currently owned stakes into stock.
Recent data shows that Coinbase has 43 million verified users, with 2.8 million of them making active transactions. Now with more retailers saying that they will accept specific cryptos as a payment method and financial services companies stating that they will allow users to use certain cryptos to make transactions, the percentage of monthly active transactions among total users is only going to skyrocket. Not only is now the time to strike while the iron’s hot because the market is talking about cryptos nonstop, but even the Federal Reserve in the US, among other world central banks such as China’s, are discussing future crypto treatment and Coinbase specifically. China has even announced that its digital currency, the digital yuan, is already being circulated by the central bank with signs of success thus far.
However, for the time being, massive volatility in the crypto market, and especially with bitcoin, is what holds it back from being a desirable currency for financial transactions over already proven and mostly grounded long-run local currencies. For example, the value of bitcoin has gone up over 400% in the past year, down this past week, then up again on Thursday. It has already gone through a boom and bust, as do many massively popular and non-sturdy markets, so who’s to say it won’t happen again. Or maybe this time, since they soon will be used for transactions, that will prove to stabilize the price a bit to lower volatility. One thing is for certain though, that the announcement from Coinbase to go public will most likely influence other digital currency exchanges to follow suit if they have not done so already.