Australians poured millions into the IPO of crypto exchange Coinbase, outstripping other public offerings like Airbnb

Coinbase is the largest U.S. cryptocurrency exchange. (Robert Nickelsberg, Getty Images)
  • Australian investors have backed cryptocurrency exchange Coinbase, pouring millions into the stock in the first few hours of it listing on the Nasdaq on Wednesday.
  • In listing, Coinbase became the first major cryptocurrency exchange to become a public company.
  • Wall Street trading platform Stake said Australian interest in Coinbase had well and truly outstripped other major IPOs like Airbnb and Slack.
  • Visit Business Insider Australia’s homepage for more stories.

Australian investors have gone into a frenzy over Coinbase as the cryptocurrency exchange made its $US100 billion market debut.

Launching onto the Nasdaq on Wednesday, there was enormous local interest as Australians piled into the first major publicly-listed cryptocurrency exchange.

According to Stake, the IPO saw more than $US4 million traded on the Australia trading platform in the space of just four hours, eclipsing other recent floats. For comparison, Airbnb and Slack did just a fraction of that, with around $US23,000 and $US157,000 traded on each respectively.

“This gives Aussie investors access and exposure to cryptocurrencies inside their stock portfolio from a respected company like Coinbase, with the comfort that investing on the regulated US stock markets brings,” Stake founder Matt Leibowitz said.

“Aussie investors are also drawn to Coinbase’s healthy profits – it reported an estimated US$730 million to US$800 million in net profit in the first three months of the year. Which blows early stage tech and finance companies out of the water.”

The trade appeared to be particularly popular among younger investors, with one in four younger than 25, and more than 40% of investors between 25 and 35.

While the stock price moved wildly, eventually tumbling into the close, the roaring price of Bitcoin and the cryptocurrency market has cleared captured public imagination.

eToro global market analyst Ben Laidler said the listing reflects the maturing of the industry as more institutional money flooded in.

“It gives people a vehicle to gain exposure to the crypto market without having to invest in cryptoassets themselves,” he said.”The stock can be included in pension funds and trackers that previously could not directly include cryptoassets, thereby further opening up the crypto market to an entirely new pool of capital.”

Local exchange BTC Markets said it was an indication of the growing acceptance of the digital asset and a sign of things to come.

“Coinbase’s listing is an industry first, but it certainly won’t be the last. It’s only a matter of time until the ASX does something similar,” CEO Caroline Bowler said.

However while it may be a sign of maturity, the stock itself isn’t necessarily a guaranteed winner. In listing, its two founders Brian Armstrong and Fred Ehrsam have realised enormous profits, which may come as a warning sign to those jumping into the stock now.

“There is a theory that when the management of an industry leader decides to cash out via an IPO, it’s a signal that the proverbial juice has been entirely squeezed,” Stephen Innes, chief global market strategist at Axi.

“Insiders that see exponential upside are happy to wait. When they see diminished upside relative to risk, they monetize their stake.”

All of that could translate to disappointment down the track for retail investors who got swept up in the stock. Right now though, there’s plenty of excitement about where the crypto market is going from here.