Coinbase’s IPO in the US has brought cryptocurrency back into the public spotlight, with its soaring share price indicative of a shift into the mainstream — perhaps for good this time.
Here in Australia, there are local startups ready to capitalise on the opportunity, already raising sizeable sums of cash themselves.
The Coinbase listing marks the first time a major cryptocurrency business has gone public. To say it went well would be putting it mildly.
Before the IPO, Nasdaq set a guide price of US$250 for Coinbase shares; however, the shares actually began trading yesterday at US$381, and eventually closed out at $328.28.
That gives the startup a market cap of about US$85.7 billion, reportedly more than ten times its last valuation.
Closer to home, this week has also seen Brisbane-based crypto trading platform Coinstash secure $2.8 million through its Birchal equity crowdfunding campaign.
The startup hits its maximum target with a good week left to go, attracting more than 1,300 investors.
The success of both the equity crowdfunding campaign and Coinbase’s IPO are “100%” indicative of a broader trend in the cryptocurrency sector, Coinstash co-founder Ting Wang tells SmartCompany.
A maturing market
Having first launched the startup in 2017, just before the first crypto-investment boom, he and co-founder Mena Theodorou have already ridden something of a crypto-rollercoaster.
That initial wave was mostly driven by retail investors, he explains. And it likely represents a continuation of that.
Coinstash’s raise was one of a very few opportunities for investors not only to get exposure to cryptocurrencies, but also to a local company operating in the space, he notes.
It marks a shift away from crypto companies raising funds through initial coin offerings (ICOs) — being sales of their own tokens for cash. ICOs dominated the startup funding news cycle back in 2017 and 2018, with Aussie startups like Havven and Power Ledger raising tens of millions in their token sales.
But, Wang is also seeing more institutional money flowing in.
Changes in monetary policies, largely due to the COVID-19 economic slump, are also driving money towards cryptocurrencies, and bitcoin in particular.
“People are now viewing bitcoin as an alternative safe haven to the traditional safe haven assets like gold or silver,” he observes.
All of this is indicative of a more mature market. And so, this time, Wang believes the shift into the mainstream will be a permanent one.
“The current boom is definitely going to be more stable,” he adds.
“The public perception of cryptocurrency, and the overall awareness and adoption is just at a whole different level.”
Regulatory hurdles remain
Of course, this all bodes well for the Aussie startup. Currently, Coinstash operates only as a cryptocurrency broker, and supports trading in 22 different cryptocurrencies. To date, it has facilitated more than $25 million worth of trades.
But, the next step is to develop products that “increase the usability” of cryptocurrencies, allowing them to earn a rate of return on their investments, to borrow against them, and to spend their cryptocurrency easily through card payments.
All of this is still subject to regulatory approval.
But, the founders are already in conversations with the Australian Securities and Investments Commission, and are planning on going through the regulator’s Innovation Hub.
The key barriers lie in the fact that this is still a relatively new industry. Regulators have to carefully consider how to classify the products, and that requires them getting up to speed on how it all works, first.
Then, they require a business case, explaining exactly how Aussies’ interests will be protected, outlining their plans, and explaining why this is the right team to execute on them.
Even so, the flurry of activity in the sector and the shifting public perception means consumer demand is there, Wang says. And that’s helpful.
People are not satisfied just to own cryptocurrency. They want to use it, and make it work for them.
“We’re trying to allow the everyday Australians to do more with their crypto holdings.”