Coinbase sell-off after trading debut dents bitcoin price

New York

COINBASE Global Inc's highly anticipated direct listing had touched off a frenzy in demand for all things crypto. A tumble shortly after its debut dented the euphoria.

Bitcoin pulled back from an all-time high as the biggest US crypto exchange tumbled to close down 14 per cent on Wednesday. It opened at US$381 a share in its direct listing in New York and spiked to as high as US$429 in the first 10 minutes of trading before turning lower. It closed at US$328.28. Bitcoin fell to its session low when Coinbase turned, before paring losses. It was doing around US$63,160 in early Hong Kong trade.

The listing is seen pushing crypto even more into the mainstream of investing, exposing legions of potential buyers to digital tokens, which have grown into a US$2 trillion industry in little more than a decade. Bitcoin, the original and biggest crypto coin, is valued at more than US$1 trillion alone after a more than 800 per cent surge in the past year.

At the closing price, Coinbase's valuation on a fully diluted basis is about US$86 billion. Given its size and visibility, Coinbase is likely to be popular with actively managed equity funds, particularly growth managers.

"It's a huge step forward for the industry and the legitimacy it brings in the eyes of investors and regulators," Mati Greenspan, founder of Quantum Economics, said on Bloomberg TV.

Growing mainstream acceptance of cryptocurrencies has spurred Bitcoin to a 120 per cent rally since December, as well as lifting other tokens to record highs. That's despite lingering concerns over their volatility and usefulness as a method of payment. Attention from regulators is poised to intensify as Coinbase becomes a public company. BLOOMBERG