As Coinbase is about to make a United States stock market debut, overseas brokerages have geared up to offer trading services with the crypto exchange stock to non-Americans. Platforms like eToro, CMC Markets, and RoboMarkets are only a few to offer Coinbase share trading on the listing of COIN on the US stock exchange.
Coinbase is publicly listing stocks on Wednesday. The company has decided to go for a direct listing on Nasdaq, meaning no underwriters will set a target price or go through a book-building process to value the stock at a target price.
Investors Must Be Cautious
“Because there are no underwriters, meaning no one is assuming the risk in connection to reselling the stock shares or performing stabilizing transactions, there is the potential for high volatility of the stock price immediately after its listing,” eToro stated.
Additionally, CMC pointed out that the crypto company could fall victim to over-valuation due to the high demand for the stock among retail investors. However, the US stock exchange issued a notice, setting a reference price of $250 on a single Coinbase share, but the market expectation is that the share will be trading at around $400.
eToro and CMC Markets’ decision came after UK-based IG Group announced that it will offer leverage trading of Coinbase shares. Though the listing might be done instantly with the US exchange, these trading platforms have to wait until Liquidity providers have sufficient liquidity of the stock.
Coinbase will be listing 14.85 million Class A common stock on the US exchange. It is one of the largest global cryptocurrency exchanges with more than 56 million verified users. However, CMC warned that the crypto exchange is facing tough competition from Binance, Gemini, Bithumb and Kraken as a few of them offer cheaper trading services.
"Coinbase IPO is one of the most high-profile and coveted IPOs of 2021. One of the world’s largest cryptocurrency exchanges goes public via direct listing and many market participants, from individual investors to institutions, are ready to seize investment opportunities from day one," RoboMarkets' head of R Trader project, Kiryl Kirychenka, said.
Meanwhile, the anticipation of the listing has pushed Bitcoin prices to a record high.
