According to the veterans of Wall Street, Coinbase’s current valuation is far too much. The estimate currently stands at $100B. CEO of New Constructs, David Trainer thinks that this is not the real case.
Coinbase is about to be directly listed. However, the trading of the shares in private have indicated $100B market value for the exchange. However, as the cryptocurrency market grows as well as with an eventual increase in competition, this valuation is bound to fall flat in the coming days.
Trainer believes that the current valuation has emotions as their basis rather than mathematical trends. Trainer added that this is probably a trick by Wall Street to conceal the real price to sell assets by marking a much higher price based on sentiments.
Coinbase And The Maturity Of The Crypto Market
New Constructs however has reported that Coinbase had turned in a profit the previous year. The profit was reported to be $322M. This has resulted in a rush of positivity amongst investors for the company’s stock. However, Trainer warns that the positivity is being carried over from the raging bull that is the cryptocurrency market currently. He says that such an event has happened previously, with other industries such as automobile manufacturing.
Similar to those industries at their highest valuations, the cryptocurrency market is only just an infant. Trainer continued that stock prices are always a reflection of the competition after the market has reached maturity. Coinbase and cryptocurrency are still far away from being considered a mature market.
Stocks and companies are different according to Trainer. To Trainer, Coinbase does not show any hints of harboring a secret that will help them keep ahead of the competition. As such, the stock valuations are recommended to be ignored. Be that as it may, it will be an event to keep an eye on for the current competition such as Gemini, Kraken, Binance, and Bitstamp.
