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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.

Thousands without power as "hazardous" winter storm lashes East Coast

Winter view from Charlotte as winter storm Izzy creates dangerous conditions in Charlotte, N.C. on Jan. 16. Photo: Peter Zay/Anadolu Agency via Getty Images

A major winter storm was lashing much of the East Coast on Sunday, causing widespread power outages and disrupting travel over the holiday weekend.

The big picture: Heavy snow and ice accumulations were "likely to produce hazardous travel," downed trees and more outages from the Mid-South to the Northeast, per the National Weather Service. Some parts of the U.S. can expect to see up to a foot of snow through Monday.

Updated 4 hours ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.