COINBASE HEADS FOR $91-BN VALUATION IN NASDAQ DEBUT

Listing marks victory for digital currency advocates in a year that has seen mainstream companies dive into the space

Cryptocurrency exchange Coinbase Global was set to be valued at more than $91 billion in a stock market debut on Wednesday that marked another big milestone in the development of bitcoin and other digital assets.

At 10:21 am ET, the company's stock was indicated to open at $350, up 40 per cent from a reference price of $250 per share, making its implied value more than three times that of exchange operator Nasdaq.

The listing, launched directly to investors instead of through a traditional IPO process run by banks, marks a victory for digital currency advocates in a year that has seen a clutch of mainstream, top-tier firms dive into the space.

The San Francisco-based firm's value has surged in line with bitcoin's own huge gains: the world's best known digital currency hit a record on Tuesday.

In a direct listing, no shares are sold ahead of the debut and the company lists directly on the exchange. U.S. gaming platform Roblox Corp also went public through a direct listing last month.

Coinbase had confidentially filed paperwork to go public in December.

The listing is by far the biggest yet of a cryptocurrency company, with the San Francisco-based firm saying last month that private market transactions had valued the company at around $68 billion this year, versus $5.8 billion in September.

It represents the latest breakthrough for acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.

"The listing is significant in that it marks the growth of the industry and its acceptance into mainstream business," said William Cong, an associate professor of finance at Cornell University’s SC Johnson College of Business.

Bitcoin, the biggest cryptocurrency, hit a record of over $63,000 on Tuesday. It has more than doubled this year as large investors, banks from Goldman Sachs to Morgan Stanley and household name companies such as Tesla warm to the emerging asset.

"This is a very positive thing for bitcoin in itself, as it proves the bridge that has been built from an esoteric, left-of-field arena, full of cowboys, to mainstream finance," said Charles Hayter of data firm Cryptocompare. Still, some institutional investors voiced caution over long-term prospects for Coinbase and the crypto sector.

Swiss asset manager Unigestion said it was wary of the hype around cryptocurrencies, and as a result would not be buying Coinbase stock.

"We think there is a lot of frenzy and exuberance in everything that looks like crypto," said Olivier Marciot, a portfolio manager at Unigestion, which oversees assets worth $22.6 billion.

"Hedge funds and retail will probably be the early birds in these new stocks - probably buying into them pretty heavily - which shouldn't be a clear indication of how they will be in the longer term."