It plans to quickly expand the offering to customers around the world. The company was motivated by consumer interest and advances in the technology that made transactions faster. PayPal recently added a crypto trading and shopping feature for its customers in the United States. Venture funding for crypto-related start-ups surged to its highest-ever level in the first quarter to $3 billion, according to PitchBook. The stock trading app Robinhood announced that 9.5 million of its customers had traded cryptocurrency in the first three months of the year - up more than fivefold from the previous three months. The mayor of Miami has proposed that the city accept tax payments in Bitcoin and invest city funds in the asset. In March, Morgan Stanley began offering its wealthy clients access to three Bitcoin funds, and Goldman announced that it would soon offer similar access. It inspired Tesla to buy $1.5 billion worth of Bitcoin and the payments company Square to spend $170 million. In 2015, Ethereum, a cryptocurrency network with more tech abilities, was introduced, enticing enthusiasts to build companies and funds around the technology. Coinbase earned money on transaction fees.īut Bitcoin’s wildly volatile price and a slow computer network that managed it made transactions difficult, and people began to see the currency as an investment. “It was good for credibility when people saw you could actually use a Bitcoin to buy a mattress at Overstock,” Mr. Armstrong was one of the few people in the industry who seemed prepared to comply with inevitable regulations, rather than cut corners to avoid them, said Nick Tomaino, who dropped out of business school to join Coinbase in 2013.Ĭoinbase also persuaded well-known retailers to accept Bitcoin. The company joined Y Combinator, a prestigious start-up program, and raised money from top venture capital firms including Union Square Ventures and Andreessen Horowitz. Gox, a crypto exchange that collapsed under accusations of theft and embezzlement, further tarnished the young industry.Ĭoinbase tried to change that. Headlines about Silk Road, a marketplace for buying and selling drugs and weapons with Bitcoin until the federal authorities shut it down, and Mt. “It was perceived as unserious or shady,” just like the early days of the internet, said Marc Bernegger, an investor at Crypto Finance Group, an asset manager in Switzerland. “Can it be anything more than an asset class?” Mr. Before it and similar services were created, people had to set up their own digital wallets and wire money. Others ruefully relay tales of the sushi dinner they bought with Bitcoin years ago that would be worth $200,000 today or the million-dollar pizza.Ĭoinbase eases that trading by acting as a central exchange. Many early buyers have become wildly rich by simply holding their crypto or “buying the dip” when prices fall. It has also become a lightning rod for environmental concerns because its technology uses a tremendous amount of computing power and electricity. Few people want to use Bitcoin for everyday purchases like coffee because its price is so volatile. That ethos is reflected in Coinbase’s plan to “create an open financial system for the world” and “ increase economic freedom.”īut so far, cryptocurrency is mostly a vehicle for financial speculation and trading. Industry evangelists have long predicted that cryptocurrency and its underlying blockchain technology could bring about a decentralized financial system without governments or banks - a revolution rivaling that of the internet. It did so at a valuation that rivaled that of Airbnb and Facebook when they went public.īut Coinbase’s listing also raises a question about the future of digital currency. Coinbase, based in San Francisco, is the first major cryptocurrency start-up to go public on a U.S. That gave the company a valuation of $85.7 billion based on all its outstanding shares, more than 10 times higher than Coinbase’s last private valuation.Ĭall it crypto’s coming-out party.
Coinbase shares began trading at $381 each, up 52 percent from a reference price of $250, eventually closing at $328.28. On Wednesday, digital or cryptocurrencies took their biggest step yet toward wider acceptance when Coinbase, a start-up that allows people to buy and sell cryptocurrencies, went public. And celebrities are leading the way in a digital-art spending spree using a technology called an NFT. Companies like Tesla and Square are hoarding Bitcoin. Traditional banks are helping investors put their money into cryptocurrency funds. SAN FRANCISCO - Digital currency, once mocked as a tool for criminals and reckless speculators, is sliding into the mainstream.