Crypto Projects Going Public: Could Their Stock Listing Push for Faster Adoption?
On the 14th of April, 2021, Coinbase went public by listing its shares on Nasdaq. It listed the share under the name COIN, and the move had excellent results on Coinbase’s value.
At the time of registration in the exchange, the unit price was $381, about 52% higher than its reference price of $250. However, the price of the shares closed the day at around $328.28. Accordingly, the value of Coinbase stood at around $100 billion on 15th April, around 1000% more than the original private valuation.
There are theories that other projects could be going public too, and as such, investors speculate that stock listing will accelerate the mainstream adoption of crypto. Coinbase listing in stock exchanges is going to have a world of benefits for the crypto world. This guide will discuss how Coinbase and other platforms of going public will affect the crypto world.
Disperse Knowledge About Crypto
One benefit of crypto projects going public is the increased knowledge of crypto. Currently, there is very little knowledge about crypto assets globally. For instance, some statistics show that only 6% of Americans own digital assets.
The situation is the same in many other countries, according to a Statista report. Primarily, the reason for the lack of knowledge is because of low education on blockchain technology. However, as the crypto projects begin to go public, there will be vast education about cryptocurrencies.
For instance, platforms like Nasdaq will share knowledge about crypto assets with the world. Therefore, there will be considerable instruction about crypto. As the knowledge about crypto assets increases, people will know about the many benefits of blockchain technology and thus accelerate crypto mainstream adoption.
Build Trust in Crypto
Currently, a big chunk of the global population does not have trust in the crypto world. Some top investment analysts with an influence in the financial world still see bitcoin and crypto as scams. Therefore, many investors choose not to try using crypto, fearing losing their wealth from untrustworthy parties.
Generally, the growth and mainstream adoption of cryptocurrency are still lagging due to fear of scams. However, by introducing cryptocurrency in stock exchanges, trust in crypto will grow. Stock exchanges are highly secure and adherent to various rules and national and international regulations.
Therefore, most investors trust stock exchange platforms and, as such, invest highly in them. The registration of shares of crypto projects will make many investors purchase ownership in crypto projects and actively participate in the growth of crypto. Additionally, there will be no chance of fraud because of blockchain’s immutability.
Increased Utility and Institutional Adoption
Lack of utility and institutional adoption of crypto assets is one thing that stagnates the growth of cryptocurrencies. For instance, although some assets like Bitcoin and Ethereum are popular, they are not properly utilized by great institutions. Even digital commerce platforms have not started accepting digital assets as payment options.
Bitcoin recently got the backing of robust institution Tesla, but still, many institutions are not accepting Bitcoin and crypto payments. However, as crypto projects begin going public, more institutions will accept virtual assets as payment alternatives. Stock markets, large companies with huge followerships, and many more will allow customers to pay using currencies like Bitcoin.
Moreover, digital commerce platforms like Amazon, Alibaba, eBay, and many more will also give users crypto payment options. Ultimately, even smaller merchants will accept crypto payments, and at that point, crypto will be fully mainstream.
Increased Crypto Regulations
Many financial experts tend to ignore using crypto because they believe that the digital world is unregulated. While that may be partially true, such comments have had a devastating impact on the growth of virtual currencies. Generally, blockchain developers must find ways to increase the regulations in cryptocurrencies to attract investors.
However, the introduction of blockchain projects ownership as shares will open the crypto world to more regulations. As regulations increase in crypto, so will the trust and, ultimately, the number of users. Therefore, the increased regulations will attract more investments and accelerate crypto adoption.
However, although increased regulation will have a positive impact, there will be negative consequences. Primarily, the role of crypto is to be an alternative to the highly regulated and controlled financial options. Therefore, increasing regulations will make virtual currencies lose their meaning.
Since Coinbase announced its plans to go public by rationing its shares, there have been questions about how the move will affect crypto. There are already upcoming speculations that other projects are planning to go public. However, there arose a question of how the IPO and share sale will affect the crypto space.
This guide discusses the possible impact of the Coinbase move. Foremost, going public will help in building trust, which is lacking in the crypto world. Moreover, with the move of Coinbase, crypto assets will get the much-needed institutional adoption and increased utility.
Finally, the move to the public will help increase the knowledge in crypto and the regulations in crypto. Therefore, there is no doubt that the move by Coinbase will attract accelerated institutional adoption.