Bitcoin hits record high above $62,000
Bitcoin reached $62,377, a huge gain of 114 percent since the start of the year.
After crashing in 2018, the value of bitcoin rebounded and it has set records since late last year -- rocketing from around $12,000 in October to more than $60,000 a month ago.
The arrival Wednesday of cryptocurrency exchange Coinbase on the Nasdaq is one of Wall Street's most anticipated events of the year even though some question whether the cryptocurrency market is sustainable.
Estimates of Coinbase's value vary depending on how it is calculated, but its capitalisation is expected to range from $70 to $100 billion.
That would make it the largest initial public offer (IPO) for a US company since Facebook in 2012.
Founded in 2012, the platform allows users to buy and sell about 50 cryptocurrencies.
The cryptocurrency market has grown exponentially in 2021 and is now worth a staggering $2.0 trillion as it increasingly attracts interest from big names on Wall Street.
While anybody can "mine" for new bitcoins, to do so requires giant data centres, which has led to platforms such as Coinbase providing a way of trading in cryptocurrencies.
Banks and payment services such as Paypal allow transactions in certain digital currencies.
Despite 12-year-old bitcoin's volatility and limitations as a means of payment, it is seen as a store of value to rival and perhaps one day surpass gold as a haven investment in the face of high inflation for example.
Electric car giant Tesla has invested $1.5 billion in bitcoin and in March began accepting the currency as payment.
Tesla's multi-billionaire chief executive Elon Musk has also used social media to espouse the merits of cryptocurrencies, helping to lift interest and prices.
Coinbase brings cryptocurrencies to Wall Street
The arrival Wednesday of cryptocurrency exchange Coinbase on Nasdaq is one of the most anticipated events of the year on Wall Street, where enthusiasm for record-breaking bitcoin is in full swing, despite questions about the sustainability of the market.
The first company devoted entirely to cryptocurrency to enter the US stock exchange, Coinbase -- which will be listed under the symbol COIN -- is already a heavyweight.
Estimates vary depending on the method of calculation, but its capitalization is expected to range from $70 to $100 billion, the largest IPO for a US company since Facebook in 2012.
Coinbase chose a direct listing, which does not allow it to raise new funds but does offer current shareholders -- founders, employees and historical investors -- the opportunity to sell their stocks on the market.
Spotify, Slack, Palantir and Roblox had also used this method for their Wall Street debuts.
Nearly 115 million Coinbase shares will be put on the market. Their reference price will be announced Tuesday evening.
Founded in 2012 in San Francisco by Brian Armstrong and Fred Ehrsam, the platform allows users to buy and sell about 50 cryptocurrencies, including bitcoin and ether.
Coinbase claims 56 million total users and a little more than six million people making transactions each month, according to estimates from its first-quarter results, released in early April.
The company has benefited from bitcoin's meteoric rise over the past year, with the crypto asset's price rising from $6,500 last April to a record-high above $62,000 on Tuesday.
In the wake of the reigning cryptocurrency, other virtual currencies -- such as ether, Litecoin or Stellar Lumens -- have also surged.
"With bitcoin already having more than doubled in the last six months and cryptocurrencies becoming more popular with more mainstream investors, it can certainly be argued that crypto has become more mainstream in the last 12 months," said Michael Hewson, the chief market analyst at CMC Markets UK.
As a result of this craze, Coinbase's revenue has increased almost tenfold in the course of a year to $1.8 billion in the first quarter, according to group estimates.
Its profit increased 25-fold, in the range of $730 to $800 million.
The success of Coinbase and cryptocurrencies in general has given some rivals ideas: the head of the California-based cryptocurrency exchange platform Kraken told CNBC last week he hopes to take his company public next year, also via a direct listing.
If the situation seems favorable to Coinbase, caution remains the order of the day among observers, who recall the company's dependence on the price of virtual currencies, which tend to be volatile.
Before its spectacular rise in recent months, bitcoin had experienced setbacks, particularly in 2018 when the currency kept falling.
Some are also drawing attention to the distrust of lawmakers in several countries who are concerned about cryptocurrencies being used for illicit purposes.
"Will Coinbase prove popular with retail investors? There is little doubt about that prospect with demand and interest set to be high," said Hewson.
"The bigger question is whether any valuation is sustainable, particularly given how many governments aren't particularly enamoured of cryptocurrencies," he said.
"Future regulation is likely to be a clear and present danger and a probable headwind" in the long term.
Coinbase was recently charged by the US Commodity Futures Trading Commission (CFTC) of "reporting false, misleading, or inaccurate" information about cryptocurrencies and manipulating the market between 2015 and 2018.
Without admitting wrongdoing, Coinbase paid a $6.5 million fine, and the company was forced to push back its listing date on Wall Street.
Another factor that could put Coinbase at a disadvantage is its commissions, which the company uses to earn money.
These levies are higher than some of its competitors, particularly Binance.
But that platform, founded in China, seems to alarm regulators even more than Coinbase.
According to Bloomberg, the CFTC recently opened an investigation into whether Binance, which is not registered with the agency, had violated US commodities law.