Kiwi investors jump at opportunity to buy into US cryptocurrency float
Kiwi investors appear to have jumped on board the Nasdaq debut of cryptocurrency exchange Coinbase Global.
Figures from Australian investment platform Stake show its New Zealand customers invested US$1.17 million in Coinbase stock, while Kiwi platform Hatch saw about 300 investors plough US$1.2m into the stock in just four and a half hours of trading.
Coinbase shares opened at US$381 a share when the company debuted on the market on Wednesday (US time), up 52 per cent from a reference price of US$250 per share set on Tuesday.
However, the price was only 10.9 per cent above the US$343.58 volume-weighted average price at which Coinbase shares were trading privately in the first quarter of this year.
At US$381 a share, Coinbase was valued at close to US$100 billion.
Founded in 2012, the San Francisco-based Coinbase enables its customers to buy and sell cryptocurrencies. It boasts 56 million users globally and an estimated US$223b in assets on its platform, accounting for 11.3 per cent of crypto asset market share, regulatory filings showed.
Kristen Lunman, co-founder and general manager of Hatch, said the initial public offer had proven popular, although not as popular as the 2020 IPO of US software company Snowflake.
“It was likely double that.” Lunman said the interest in Coinbase was driven by a wider acceptance of cryptocurrency and its growth prospects.
She said the Coinbase listing allowed people to get access to an exposure to cryptocurrency without having to buy cryptocurrency itself.
Lunman said some Hatch investors liked to jump in on day one of a company’s IPO, on the expectation of there being a pop in the share price, while others would sit back and wait for a buying opportunity.
She expected the stock’s share price to be volatile.
At investment platform Sharesies, co-founder Leighton Roberts said there were 1204 investors with a total of 1618 Coinbase shares. At the opening price, that would be worth about US$600,000.
Stake founder and chief executive Matt Leibowitz said interest in Coinbase from its New Zealand clients had been 20 times higher than any recent US IPO. About half of the Coinbase investors through its platform were aged 25 to 35 years old.
“They get the proposition — they probably use Coinbase or something similar and they understand the utility it provides.”
He said Coinbase had a strong global following and the company was highly profitable as well.
“It is not a startup anymore. It’s not one of those ones where you worry about when they are ever going to make money.”
Leibowitz said Stake had some inkling of the popularity of Coinbase ahead of the listing as it was the most common question for its customer support team: “is Coinbase going to be available from day one?”
“I think what you are seeing with younger investors is that they may be dabbling in cryptocurrency to try and get exposure whereas the stock has got a little bit more legitimacy to it. So people feel more comfortable with it. It is quite an attractive proposition.”
He said the average investment was also higher at US$3400, compared to its normal average of under US$1900.
Other US IPOs expected soon include trading platform Robinhood, WeWork and Rocketlab, which is set to list in the second quarter of this