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Illustration: Eniola Odetunde/Axios

Coinbase’s upcoming public listing will be a watershed moment for a cryptocurrency industry longing for legitimacy.

Why it matters: As the first major crypto exchange to go public — and one of the industry's few blue chip companies — industry insiders believe the float will double as validation for a technology that's still seen by many as lawless and experimental.

The big picture: “This is basically the ‘Netscape moment’ of crypto,” argues Electric Capital's Avichal Garg, harkening back to the Internet browsing company whose success and 1995 IPO ushered in the modern web. (Coincidentally, Netscape co-founder Marc Andreessen is on Coinbase’s board.)

  • For crypto, this would mean getting more of Wall Street to invest, including in innovative tokens beyond Bitcoin and Ether.
  • It's also the first major opportunity for retail investors to get company-level exposure to crypto, as so far they've been limited to more index-like products. Or, as Slow Ventures' Jill Carlson tells me: “What I’m expecting is a demonstration of pent-up demand for crypto."

Tailwinds: Coinbase's listing also is expected to create a public valuation comp not just for rival exchanges, but also for other crypto businesses like infrastructure and custody.

  • There also will be voracious reading of Coinbase's financial disclosures, given that Coinbase CEO Brian Armstrong revealed in late 2019 that the company had been profitable for the last three years and had generated $2 billion in transaction fee revenue since inception.

Yes, but: Despite the recent Bitcoin boom, there's no guarantee Coinbase will be a hit with public investors.

  • “I suspect it will be schizophrenic,” says an industry source, comparing it to how Tesla polarizes investors.
  • And since its revenue is so heavily dictated by the cryptocurrency markets, it'll have to make investors comfortable with potential swings in its own financials.

Coda: Bloomberg reports that crypto exchange Bakkt, which is majority-owned by the New York Stock Exchange’s parent company and used to employ Kelly Loeffler as CEO, is nearing a deal to go public via a SPAC at a $2 billion valuation.

  • Bakkt, however, is much newer and smaller than Coinbase, mainly offering Bitcoin futures trading and some other financial services.

Go deeper

Dan Primack, author of Pro Rata
Jan 11, 2021 - Podcasts

Bakkt CEO on mainstreaming Bitcoin and other digital assets

Bitcoin exchange and digital wallet company Bakkt announced plans to go public via a SPAC, in a marriage of two of Wall Street's hottest trends.

Axios Re:Cap speaks with new Bakkt CEO Gavin Michael to discuss the company, the deal and if this move will codify cryptocurrencies as part of mainstream American finance.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden readies massive shifts in policy for his first days in office.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.
  6. World: WHO team arrives in China to investigate pandemic origins.
Dave Lawler, author of World
3 hours ago - World

Alexey Navalny detained after landing back in Moscow

Navalny and his wife shortly before he was detained. Photo: Kirill Kudryavtsev/AFP via Getty

Russian opposition leader Alexey Navalny was detained upon his return to Moscow on Sunday, which came five months after he was poisoned with the nerve agent Novichok. He returned despite being warned that he would be arrested.

The latest: Navalny was stopped at a customs checkpoint and led away alone by officers. He appeared to hug his wife goodbye, and his spokesman reports that his lawyer was not allowed to accompany him.