Just over a decade ago, digital assets were a theoretical concept, announced to the world through an anonymous white paper. Today, a digital asset exchange is trading on the Nasdaq exchange with a market cap of $62 billion as of 14/04/2021, excluding options and restricted stock units. Coinbase’s1 direct listing represents a watershed moment for the digital assets industry.

Coinbase’s direct listing is the largest listing (IPO, SPAC, or otherwise) of any digital asset company in history, at valuations that reflect a direct competition with traditional exchanges.2 In our opinion, a valuation at this level indicates the full scale of global digital asset adoption by both institutions and individuals.

Coinbase Valuation Rivals Traditional Finance Exchanges

Full year 2020 revenues for Coinbase were $1.28 billion and net income was $322.3 million.3 In its preliminary Q1 2021 results, Coinbase projected 2021 revenues of $1.8 billion and net income within $730 to $800 million.4 These estimates represent a massive spike in growth of both top and bottom-line revenues that exceed their full-year returns for the prior full-year.

With the listing of Coinbase, the market cap of publicly traded pure-play digital asset companies (as defined by MVIS and included in the composition of the MVIS Global Digital Assets Equity) rises to $207.4 billion as of 23/04/2021.5 MVIS defines pure-play digital asset companies as companies which (i) generate at least 50% of its revenues from digital assets projects; (ii) generate at least 50% of its revenues from projects that, when developed, have the potential to generate at least 50% of their revenues from the digital assets industry; and/or (iii) have at least 50% of its assets invested in direct digital asset holdings or digital asset projects. We believe, over the last few years, both revenues and valuations of publicly traded digital asset companies have exhibited strong growth trends.

Digital Asset Ecosystem Evidences Structural Growth

This growth is not happening in a bubble. We view the digital assets industry as a long-term structural growth story. Digital assets are starting to mature, with adoption and support coming from both retail and institutional investors.

MVIS Global Digital Assets Equity Index


Source: MV Index Solutions. Rebased to 1,000. Data as at 30 April 2021. 

2 VanEck. 
3 Coinbase 
4 Coinbase 
5 VanEck, MVIS, as of 23/04/2021.

About the Author:

John Patrick Lee joined VanEck in 2014 and is currently an ETF Product Manager focusing on video gaming, esports and international equities. His Responsibilities include business management of the existing ETF lineup, market strategy and positioning and product development. Prior to joining VanEck, John Patrick served as an Investment Advisor Representative with Dorsey Wright Money Management. He received a bachelor’s degree in English Literature from the College of William and Mary and holds a Chartered Financial Analyst® designation.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.