First Mover: Crypto’s $ 35T moment may come from Analog-World stock quotes

The stock market is not usually seen as an ally of cryptocurrencies, but with large US exchange Coinbase now rumored to be considering a stock listing, some digital asset industry insiders say a move towards greater ownership public could accelerate mainstream adoption.

By becoming publicly traded, cryptocurrency-focused companies could attract investors to the $ 35 trillion US stock market. The underlying math shows that just a 1% allocation in crypto stocks could mean $ 350 billion in new investment for companies in the space. Compare that to the total market value of $ 287 billion of digital asset markets and suddenly there’s a lot more capital in the industry, even if it’s not directly in cryptocurrencies.

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New listings and initial public offerings would surely generate a streak of coverage on analog world TV channels like CNBC, as the Wall Street Journal and Bloomberg News publish seemingly breathless headlines on the first day trading action. No publicity is bad publicity, and all of this gives digital asset companies generous exposure to a wider range of potential investors who typically only trade stocks.

Steve Ehrlich, CEO of the Voyager Digital crypto brokerage platform, which has been publicly traded on the Toronto Stock Exchange since February 2019, told First Mover in a telephone interview that the stock market listings promise a whole new perspective for the cryptocurrency industry.

“We always thought that being a public company was something necessary in the crypto space,” Ehrlich said over the phone. “It’s great for the industry.”

A handful of crypto companies have already taken the path of stock listing.

According to CoinDesk Research, there are more than two dozen publicly traded companies, from bitcoin mining company Argo, which was listed on the London Stock Exchange in 2018, to bitcoin mining computer maker Canaan, which listed deposit receipts on the Nasdaq late. last year. Bitmain, another mining computer manufacturer, had previously considered an initial public offering (IPO) in Hong Kong in 2018 and is said to be exploring a list in the United States.

Earlier this month, industry sources told Reuters that San Francisco-based exchange Coinbase, valued at around $ 8 billion at its latest valuation, was seriously considering a direct listing in 2021.

Just this week, Alibaba’s subsidiary Ant Group announced it was planning an IPO in both Shanghai and Hong Kong with a valuation of $ 200 billion. Although the company is best known for its Alipay payment app, the Hangzhou-based company also operates its own highly scalable blockchain network and is believed to be a major planned issuer for China’s digital yuan.

If it were to pass, the double IPO would likely make Ant Group the largest company operating in the blockchain space.

Ehrlich, a longtime entrepreneur who previously served as a senior executive at online stock trading firm E * Trade, said he welcomed the news that companies like Coinbase were now considering stock listing.

According to Ehrlich, auditors can not only review Voyager’s financial statements, but can also help ensure that the company operates ethically and in compliance with regulations. This could provide the accountability, transparency and comfort that investors demand, particularly for a still-maturing industry that has been battered by litigation, scams, hacks and fraud.

Binance, the largest exchange in the world, has resisted requests to disclose its headquarters location. Tether, the $ 10 billion stablecoin, is haunted by allegations that the token is not adequately backed by dollar reserves. Just this week, the CEO of Canadian exchange Coinsquare was forced to resign after the local regulator discovered that the exchange regularly made fake trades on the platform.

“Our customers love it, the transparency that comes with it,” Ehrlich said.

Yet another benefit: Multiple quotes could allow equity investors to bet on single or multiple executive teams and strategies within the cryptocurrency industry. This way they don’t just put all the eggs in the bitcoin basket, as predicted by the proposed issuers of an exchange-traded fund of bitcoin, which has yet to gain approval from the US Securities and Exchange Commission.

It goes without saying that a bet on Coinbase would represent a bet on broad growth in digital asset markets, including “altcoins” such as ether and litecoin.

Grayscale, which offers cryptocurrency funds known as “trusts” that trade as stocks, reported last week that total capital inflows into non-bitcoin products have increased sevenfold in the past 12 months. (Grayscale is a unit of investment firm Digital Currency Group, which also owns CoinDesk.) Multiple stock quotes could satisfy investors’ growing appetite for exposure to a wide range of cryptocurrencies, similar to how a mutual fund could buy a large, vertically integrated energy producer like Exxon for exposure to oil, natural gas, refining and retail distribution, without ever having to venture directly into commodity markets.

In an industry where market-leading companies can get by without revealing their location, the trend could help bring the necessary amount of transparency and trust into the digital asset space.

BTC: Price: $ 9,561 (BPI) | Maximum in 24 hours: $ 9,682 | Minimum in 24 hours: $ 9,454

Trend: Bitcoin is trading steadily on Friday after three consecutive daily gains.

The leading cryptocurrency by market value is changing hands around $ 9,560, representing a slight decline over the course of the day. Bitcoin was turned down near $ 9,700 during US trading hours on Thursday. Prices still rose by more than 3% on a weekly basis.

The weak tone observed at press time could be associated with renewed risk aversion in traditional markets. Major European equity markets fell more than 1% at press time, apparently due to China-US tensions. China announced the closure of the US consulate in the southwestern city of Chengdu in retaliation for the recent US decision to close the Beijing diplomatic mission in Houston.

While bitcoin may face selling pressure, the immediate bullish bias confirmed by Tuesday’s 1.5% gain would only be invalidated if prices find acceptance below $ 9,480.

A strong rebound from that level would reinforce the immediate bullish bias and shift focus to $ 9,800, the resistance of the trend line that falls from the December 2017 highs to June 2019.

If prices establish a foothold below $ 9,480, we could see a deeper dip towards $ 9,150 (July 21st low).