Non-American Trading Platforms Line Up to List Coinbase Shares
As Coinbase is about to make a United States stock market debut, overseas brokerages have geared up to offer trading services with the crypto exchange stock to non-Americans. Giants like eToro and CMC Markets have become the latest to offer Coinbase share trading at listing.
Coinbase is publicly listing stocks on Wednesday. The company has decided to go for a direct listing on Nasdaq, meaning no underwriters will set a target price or go through a book-building process to value the stock at a target price.
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“Because there are no underwriters, meaning no one is assuming the risk in connection to reselling the stock shares or performing stabilizing transactions, there is the potential for high volatility of the stock price immediately after its listing,” eToro stated.
CMC also pointed out that the crypto company could fall victim to over-valuation due to the high demand for the stock among retail investors. The US stock exchange, however, issued a notice setting a reference price of $250 on a single Coinbase share, but the market expectation is that the share will be trading around $400.
eToro and CMC Markets’ decision came after UK-based IG Group announced that it will offer leverage trading of Coinbase shares. Though listing might be done instantly with the US exchange, these trading platforms have to wait until liquidity providers have sufficient liquidity of the stock.
Coinbase will be listing 14.85 million Class A common stock on the US exchange. It is one of the largest global cryptocurrency exchanges with more than 56 million verified users. CMC, however, warned that the crypto exchange is facing tough competition from Binance, Gemini, Bithumb, and Kraken, as a few of them also offer cheaper trading services.
Meanwhile, the anticipation of the listing has also pushed Bitcoin prices to record high.
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