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Illustration: Annelise Capossela/Axios

Coinbase, the country's largest cryptocurrency exchange, is expected to go public today at what could be a valuation north of $100 billion.

Why it matters: This gives crypto a Wall Street seal of legitimacy, after an early existence marred by ties to illicit goods.

Details: Coinbase is going public via a direct listing, rather than through an initial public offering (IPO) or special purpose acquisition company (SPAC). This means that early investors and employees will sell shares directly, with Coinbase itself not receiving any proceeds.

  • "It's exactly in the spirit and ethos of crypto," Coinbase president and COO Emile Choi tells the Axios Re:Cap podcast, in an episode posting later this morning. "Let the market determine what the price should be without intermediaries."
  • Coinbase was valued at over $100 billion in private stock sales earlier this year, which the company launched to help determine a reference price for today's trades.
  • The Nasdaq last night gave Coinbase a $250 per share reference price, which would work out to a $65 billion valuation, but direct listing reference prices are rarely close to initial trades. Slack, for example, began trading 48% higher than its reference price.

The big picture: Coinbase is going public in the midst of a Bitcoin price boom that's lasted for more than a year.

  • The San Francisco-based company reports between $730 million and $800 million of net income for the first quarter of 2021, on a whopping $1.8 billion of revenue.
  • It had reported a $322 million profit on $1.28 billion in revenue for 2020, compared to a $30 million net loss on $534 million in revenue for 2019.

A bull case is that if crypto investing continues to grow in popularity among both retail and institutional investors, Coinbase is best positioned to capture the lion's share of that growth.

A bear case is that if crypto investing continues to grow in popularity, it commoditizes the trading process, potentially rendering Coinbase as just another player.

  • Choi argues that Coinbase would offset commoditization by continuing to offer a wider range of cryptocurrencies than rivals. Plus, it is building a business whereby corporate treasuries can add large amounts of crypto assets to their balance sheets.
  • An alternate bear case is that Bitcoin prices plummet, creating what industry insiders refer to as a "Bitcoin winter."

The bottom line: This is the stock that every tech and finance insider will be watching today.

Go deeper

What to watch as Wall Street prepares for blockbuster Coinbase listing

Illustration: Eniola Odetunde/Axios

Cryptocurrency will come to Wall Street like never before when Coinbase becomes a publicly-traded company on Wednesday.

Why it matters: The listing could value the company at upwards of $100 billion.

New York prepares for staff shortages from health vaccine mandate

New York Gov. Kathy Hochul during a news conference Tuesday in New York City.. Photo: Mark Kauzlarich/Bloomberg via Getty Images

Gov. Kathy Hochul (D) announced Saturday she would declare a state of emergency if there were health worker shortages due to New York's upcoming COVID-19 vaccine mandate.

Why it matters: Hochul moved to reassure concerns of staffing shortages in the health care sector in a statement that also outlined plans to call in medically trained National Guard members, workers from outside New York and retirees if necessary when the mandate takes effect Monday.

California to remove word "alien" from state laws

Gov. Gavin Newsom during a September news conference in Oakland, California. Photo: Jane Tyska/Digital First Media/East Bay Times via Getty Images

California is removing the word "alien" from its state laws and replacing it with words such as "noncitizen" and "immigrant," Gov. Gavin Newsom (D) announced.

Why it matters: The word "alien" began to be used in the 1990s "as a political dog whistle to express bigotry and hatred without using traditionally racist language," per a statement from Newsom's office.