Coinbase and the cryptocurrency boom: who benefits?
Coinbase, the largest US-based cryptocurrency platform, officially became a publicly traded company listed on the Nasdaq exchange in New York on Wednesday. Its shares were indicated to start trading at 365 US dollars - well above the 250 dollar reference price - and remained considerably higher, closing at 328.28 dollars. Commentators view the hype with scepticism.
Speculation piled on speculation
De Standaard feels reminded of the speculative dealings of the late investment fraudster Bernard Madoff:
“Coinbase's IPO takes the world of fast money to the next level. It's speculation piled on speculation. ... But the high pace of the traffic is only realistic if the value of digital currency rises and keeps attracting new buyers. If there are no new potential buyers, the game will eventually come to a stop. That is the lesson to be learned from Madoff. ... As with every bubble in financial history, there comes a moment when even the last doubters are sucked into the unstoppable spiral. ... If they, too, change course, the game comes to an end.”
Primarily for investment
The growing acceptance of Bitcoin and other cryptocurrencies does not mean that they will become a preferred means of payment, the Badische Zeitung points out:
“Their biggest problem lies in their fluctuating value compared to traditional currencies. The value of cryptocurrencies can go up and down rapidly within a very short time. Neither consumers nor producers like that. Moreover, the use of cryptocurrencies entails relatively high fees, which speaks against their suitability for daily use. ... Cryptocurrencies seem like a place where money multiplies overnight right now. If many investors believe that this is the case and invest there, this belief will become reality. However, such beliefs can also change again quickly on the financial market.”