COIN price doesn’t impress as more crypto companies are eager to go public

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2021 has been a roller coaster year for the crypto industry, with Bitcoin (BTC) hitting an all-time high of $ 65,000 earlier this year in April, only to dip into the sub $ 30,000 zone a few months later. . However, a moment widely seen by many as a turning point for the industry, at least in terms of mainstream legitimation, was when Coinbase (COIN) debuted on the Nasdaq via direct listing.

Until April 14, the day of the aforementioned registration, the reference price of COINs has been set at $ 250. However, it’s worth remembering that back then, the digital asset market was at its absolute peak, which resulted in the price of COIN soaring just minutes after its launch, reaching $ 430. That said, asset prices have since continued to decline steadily, currently trading at a 90-day loss of around 40% at a price of around $ 242.

The relatively poor performance of COINs can, in part, be attributed to the bearish environment that has engulfed the market in recent months. Since the stock was listed, the total market cap of the crypto market has grown from $ 2.1 trillion to $ 1.28 trillion. Despite the turmoil, however, a number of companies felt confident enough to move forward and announced their IPOs.

Not only that, venture capital and institutional funds have continued to pump money into this space. For example, data available online suggests that more than $ 17 billion has already gone into various companies operating in this market. In May alone, Block.one, a blockchain software company, injected $ 10 billion in digital assets and money into a new Bullish Global crypto exchange. Likewise, hardware wallet maker Ledger SAS was also able to raise $ 380 million from investors, recently led by 10T Holdings.

Why is the COIN going down?

As it stands, COIN seems to work somewhere between crypto and the stock markets i.e. the offer is a value identifier based on crypto technology but could not play by the rules of the stock market. Antoni Trenchev, co-founder of crypto lending firm Nexo, told Cointelegraph that the valuation of COINs is absolutely correct and the asset moves like any other similar stock, adding:

When problems loom in the corporate sector, the stocks of companies working in the field tend to suffer. After all, Coinbases’ IPO took place in April, with cryptocurrencies still hitting all-time highs. Let’s not coat things, the market has gone down considerably.

Despite Trenchev’s apparent lack of concern about the performance of Coinbases shares, Kadan Stadelmann, chief technology officer of blockchain solutions provider Komodo, believes that one of the main reasons for the decline of COINs has been the rise of decentralized exchanges ( DEX). In their most basic sense, DEXs can be thought of as new decentralized or DeFi-based financing offerings that seek to offer lower trading fees as well as better incentives for market makers.

In this regard, Stadelmann further pointed out that in the past Coinbase has focused its growth efforts exclusively on the US market, which appears to have hampered the adoption of COIN, adding:

That is starting to change, however, with recent announcements that Coinbase is launching operations in Germany and expanding hires in India. These steps are promising, but even with sufficient resources, it takes time to establish a commercial presence in new markets where other crypto firms have established offerings.

Trenchev also believes that just because Coinbases’ shares are publicly traded doesn’t mean that it has reached mainstream investors. That said, he is convinced that the stock market is perfectly positioned to tap into a river of public investment. The secret ingredient that is missing right now is time. Traditional investors need time to familiarize themselves with the crypto industry in order to invest with confidence in companies like Coinbase. In this sense, COIN has not yet seen an influx of investors, he added.

Are traditional investors still a bit leery of crypto?

Providing his thoughts on why so many investors are still unsure of the offerings associated with crypto like COIN, Red, a community moderator for decentralized yield farm aggregator Harvest Finance, told Cointelegraph that When it comes to the traditional market, investors are still bewildered by the volatility and endurance of the markets, adding: Although Coinbase is very innovative and market leader in many ways, though traditional markets are still uncertain about the underlying product , their COIN offer is likely to suffer from the same negative sentiment.

Additionally, as regulators continue to pay more attention to this space, primarily trying to put in place various financial safeguards, Red believes that a growing list of centralized entities will seek to ensure that their offerings are ‘Assets are Fully Compliant: Going through a listing process through traditional markets helps them engage with said regulators and legal entities.

Speaking of which, Ganesh Swami, CEO of Covalent, a blockchain data analytics company, told Cointelegraph that the next wave of crypto adoption will be the by-product of all the holistic regulatory developments currently taking place in the world. He further underlined:

We need to educate regulators on the benefits of DeFi and Web 3.0 to create regulations that will help us build a decentralized future together. With compliant instruments like crypto ETFs and KYC-enabled DeFi products emerging in the United States and Canada, there is a unique opportunity for regulatory frameworks in different regions to grow stronger and join the force. Crypto companies go public, a trend for the future?

While Coinbases’ stock price action did not impress, the company has paved a unique path for the growth of crypto-native platforms. As a state-owned company, the company is now required to disclose all kinds of information about its business operations, which over time will help build confidence in the crypto market.

Speaking of which, Trenchev believes that as regulations surrounding the crypto industry continue to become clearer, it will be easier for native blockchain companies to operate in the world of traditional finance. IPOs most likely becoming a joint venture strategy for most. major crypto entities at some point in the future.

Finally, Joshua Frank, co-founder and CEO of crypto data firm The TIE, told Cointelegraph that while there haven’t been many non-crypto companies making big acquisitions in the traditional market, considering current circumstances, if the big crypto companies want liquidity. they will have to be made public: we will certainly see a considerably larger number of public offers over the next two years.

The list is already growing, quickly

In mid-July, Core Scientific, one of the largest Bitcoin mining operations in North America, released a statement showing it had completed a $ 4.3 billion merger with Power & Digital Infrastructure Acquisition Corp , a Special Purpose Acquisition Company (SPAC). As a result, Core will now join a small list of publicly traded Bitcoin mining companies in the United States, which also includes Riot Blockchain and Marathon Digital.

Likewise, Argo Blockchain, a UK-based publicly traded company specializing in crypto mining, recently started a process by which it seeks to apply for an IPO in the United States. In this regard, a registration dossier filed by the company with the United States Securities and Exchange Commission (SEC) shows that Argo is pursuing a dual listing and an initial public offering of US depository shares.

Related: Illusion Or Reality? Crypto demand falters or is about to charge

Finally, amid China’s regulatory crackdown on its local cryptocurrency market that has caused Bitcoin prices to stagnate sharply around $ 32,000, global fintech firm Circle has announced its decision to host a initial public offering which is expected to take place in the near future. Circles’ merger with Concord Acquisition Corp, a SPAC, has the company valued at $ 4.5 billion, with the combined entity due to debut on the New York Stock Exchange under ticker CRCL before the end of the year.

That said, whether it is a bear market or a bull market, the crypto industry is undoubtedly gaining a lot of momentum. However, the question remains: how long will it take for the industry to find its place in the realm of traditional finance? Overall, the interest in investing in crypto companies is a positive sign for the industry as a whole, especially as more companies and venture capital funds continue to grow. injecting liquidity into this space, as well as crypto companies taking the IPO route.

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