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Shares in Coinbase Global Inc had a choppy Nasdaq debut on Wednesday, with the cryptocurrency exchange’s valuation swinging from as high as US$112 billion to as low as US$83 billion.

Coinbase’s stock market debut, done through a direct listing where no shares are sold ahead of the opening, marks another milestone in the development of bitcoin and other digital assets.

It comes amid a surge in the value of cryptocurrencies which has lured a clutch of mainstream, top-tier firms dive into the space.

Coinbase’s stock opened at US$381 per share, up 52.4 per cent from a reference price of US$250 per share set on Tuesday though only 10.9 per cent above the US$343.58 volume-weighted average price Coinbase’s shares were trading at privately in the first quarter of 2021.

The stock reversed gains to trade at around US$318 at 3:02 p.m. eastern time. At US$318, Coinbase has a fully diluted valuation, which includes unvested stock options and restricted stocks, of US$83 billion and a market capitalization of US$63.3 billion.

By comparison, New York Stock Exchange owner Intercontinental Exchange Inc has a market cap of around US$66 billion.

Founded in 2012, the San Francisco-based firm boasts 56 million users globally and an estimated US$223 billion assets on its platform, accounting for 11.3 per cent of crypto asset market share, regulatory filings showed.

“We’re just very grateful to be able to bring transparency to the crypto economy, the ecosystem that we’ve all been building over the last 10 years,” Coinbase Chief Financial Officer Alesia Haas said in an interview.

“It just brings this level of recognition that this is an industry that is here, that is growing, and that (is not just) in the corners.”

Coinbase was valued at just under US$6 billion as recently as September, but has surged in line with bitcoin’s gains this year.

The world’s biggest and best-known cryptocurrency hit a record of over US$63,000 on Tuesday and has more than doubled in value this year as banks and companies warmed to the emerging asset.

BEHOLDEN TO BITCOIN?

The company’s most recent financial results underscore how revenues have surged in lock-step with the rally in bitcoin trading volumes and price.

In the first quarter of the year, as bitcoin more than doubled in price, Coinbase estimated revenue of over US$1.8 billion and net income between US$730 million and US$800 million, versus revenue of US$1.3 billion for the entire 2020.

“The correlation to bitcoin will be very high after the stock stabilizes after listing,” said Larry Cermak, director of research at crypto website The Block.

“When the price of bitcoin goes down, it’s inevitable that Coinbase’s revenue and inherently the price of the stock will decline as well.”

Regulatory risks also loom, others said, as Coinbase increases the number of digital assets users can trade on its platform.

Coinbase last year suspended trading in major digital currency XRP after U.S. regulators charged associated blockchain firm Ripple with a US$1.3 billion unregistered securities offering. Ripple has denied the charges.

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This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.

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