Agree. What’s the upside? How can Coinbase be valued at nearly that of large banks that process orders of magnitude more transactions and can actually earn money on balances? NYSE and NASDAQ are surely not valued at anywhere close to $100b. Does that mean Coinbase can acquire them? Bubbles are bizarre.

EDIT: Yes, it is valued at more than ICE and NASDAQ combined with a fraction of the revenue and significant risk. Most optimistic outcome priced in at $100b. Is the benefit of *NoPOs” that there is no underwriter to push back on the valuation? Maybe you can get a few suckers at a super high price therefore you should?

> How can Coinbase be valued at nearly that of large banks that process orders of magnitude more transactions and can actually earn money on balances? NYSE and NASDAQ are surely not valued at anywhere close to $100b. Does that mean Coinbase can acquire them? Bubbles are bizarre.

I wonder how many folks here remember that AOL (yes, the dial-up folks who put CDs in magazines) acquired Time-Warner in 2000, thanks to the internet bubble. They even subordinated their brand to AOL:

https://www.nytimes.com/2018/06/15/business/dealbook/aol-tim...

By 2009, TimeWarner spun off AOL for a fraction of the original deal size.

By „fraction” you mean a quarter of revenue - Coinbase having around 1B in revenue, Nasdaq having 4B in 2020.

Then, Coinbase grew 300% in the last year, Nasdaq just 33%.

It’s like asking how Amazon can be worth more than Barnes and Noble in 2004 (or what year that was).

Except Amazon had opportunity to move beyond books. Coinbase should be valued nearly as much as Wells Fargo because maybe it will become Wells Fargo?!? Coinbase is tied to crypto inflation. That bubble can keep going but it’s a fraction of the volumes of the large players and I don’t see any long-term competitive advantage if crypto actually becomes useful to daily commerce.

EDIT: And fraction was less than 1/10th of the combined entities. Again, where’s the upside? Are you saying this gets to tens of billions in revenue? Wells is at $80 billion and valued at $150 billion. Is Coinbase going to get to $80 billion in revenue? How?

1/10 or 1/4 doesn’t really matter if they manage to keep up 300% growth for a year or two. And there is still a lot of room for growth.

As for where Coinbase can go - it can take the Wallstreet on in terms of trading securities (security tokens) and derivatives - the whole DeFi market which is what Internet was to publishing companies.

Except the internet made things easier. Trading stocks isn’t expensive or error prone. We’ll see.

Is the premise that every mom and pop will list shares in their company somewhere? The problem with that isn’t technological. It’s regulatory. And the regulations were created for good reasons.

The problem is very much technological - traditional stock market is based on opacity and exclusivity. Blockchain is based on permissionlessness and transparency.

Internet didn’t succeed because it allowed illegal stuff to be published. It succeeded because anyone could begin publishing, and if it was illegal then it was their responsibility.

With blockchain it’s similar - you can create financial instruments without gatekeepers. It is your responsibility to uphold the laws.

Such approach leads to far greater innovation. Just look at what UniSwap is doing - they are pioneering a system to exchange low volume tokens without an order book. This is something that stock exchanges tried to solve for many years and failed. Or flash loans - a concept that is virtually impossible to do on the traditional markets, and makes the whole financial system way more resilient in the end.

Disagree. The gatekeepers exist for a reason. You can make a pink sheet stock. There was a time when anyone could issue their own stock or currency. It was not better. It's why securities laws were made.

There is not a lack of lenders and loans for people to access.

These are still solutions in search of problems

I didn’t argue for the need of regulations, and I don’t argue with the reasons. I argue with the solution.

You could use your argument for reintroducing gatekeepers to information economy.

If we banished social media and independent blogs, and got back to a bunch of government-approved publishers, we would get rid of fake news, anti-science and populism within a day.

But the cost is too great and we are looking for other solutions.

Ditto with arxiv and Elsevier. You can say a lot of bad things about Elsevier, but not in terms of the quality of papers.

Gatekeepers stiffle innovation in exchange for safety. And there are other ways to arrive at safety than through gatekeepers. (e.g. by punishing people who abuse the system post-facto).

And coinbase has no USP someone with $1b sets up a competing exchange no problem, and they are in the game for 1% of coinbase valuation. They just need to innovate in some dimension, let’s say customer service (see r/coinbase).

Lol coinspot let me send out my coins to a wallet no problem. No multi week delays!

Coinbase isn't going public via SPAC. SPACs are underwritten by the usual suspects... GS, CS, DB, MS, etc.

What’s this called? It’s not underwritten per the first page.

I’m not current on the nomenclature, apparently.

I’m calling it a NoPO for no public offering.

Direct listing

The nutty valuations will continue so long as the fed maintains ZIRP and buys $120b worth of bonds each month.