Ethereum hits new all-time high but bitcoin retreats after Coinbase IPO
Ethereum (ETH-USD) continued its multi-month rally on Thursday to hit a record high of $2,488.07 (£1803.04) while bitcoin (BTC-USD) retreated after much-anticipated stock market debut of US cryptocurrency platform Coinbase (COIN) in New York.
Ethereum was up 4.4% at $2,454.52 by late morning in London, having touched the record high in early trade. Bitcoin had slumped almost 2% to $62,766.77. Bitcoin had soared to a new all-time high above $64,000 on Wednesday.
The rally has coincided with the much anticipated stock market float of Coinbase. Coinbase, the largest cryptocurrency exchange in the US, was briefly worth over $100bn when it debuted on the Nasdaq on Wednesday. Shares ended their first day of trading at $328.28, below the opening price of $381.
“The Coinbase IPO validates digital assets and also demonstrates the paradigm shift towards digitalization is happening faster than most expected," said Kevin Kang, founding principal of BKCoin Capital, a digital assets hedge fund.
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The Wall Street Journal said Coinbase's valuation was "a watershed moment for an industry." The company was only founded in 2012 but today ranks among the 100 biggest businesses in the US.
Bill Blain, a strategist at Shard Capital in London, described the debut as "a muted success" given it closed below its opening price but said: "It feels like cyber/cryptocurrencies are here to stay. You can’t simply uninvent them."
Carlos Betancourt, a founding principal of BKCoin Capital, said: "Many in crypto believe the IPO will serve as a ‘stamp of approval’ for crypto as a whole. It’s a foregone conclusion that Coinbase will become the largest crypto publicly traded company so it makes sense that there is so much buzz around the IPO."
Betancourt said he expects other public companies with links to crypto to "benefit from the IPO and to continue to outperform the market" including MicroStrategy (MSTR) and Silvergate (SI).
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