Vinay Bharathwaj, Co-founder and Co-CEO, Stockal, says there was a huge demand from the Indian investors for Coinbase IPO. Just like IPOs of Snowflake or Airbnb, we are witnessing a 30-40% rise in our support requests for Coinbase listing, he said.
Stockal is a global investment platform that enables investments in a diverse set of global assets from a single account from anywhere in the world. Founded by Sitashwa Srivastava and Vinay Bharathwaj in 2016, Stockal is headquartered in New York, with its India office in Bangalore. Stockal was launched in India in August 2019
In an interview with Moneycontrol's Kshitij Anand, Bharathwaj says that since investing in crypto is not encouraged by Indian regulators, this gives an option for investors to have an indirect exposure by investing in the Coinbase stock.
Edited excerpts:
Q) Cryptocurrency exchange Coinbase Global was valued at almost $100 billion in a Nasdaq debut. How can Indian investors invest in this to diversify their portfolio even more by including a part of crypto assets?
A) This day will be marked as a historical moment in the books of Wall Street as it bridges the gap between legacy investors and the cryptomarket.
This is like the Netscape moment for the crypto market and this will give more validation that people and large institutions need to make crypto a more mainstream asset.
Since investing in crypto is not encouraged by Indian regulators, this gives an option for investors to have an indirect exposure by investing in the Coinbase stock.
Since the stock is listed now on Nasdaq, it is currently available on the Stockal platform (stockal.com). Investors can open an account with us, fund their account within a few hours, and can get started with their global investing.
We also enable fractional investing which makes it a lot more affordable for investors to build a diversified portfolio even with a smaller investment amount.
Q) Coinbase will trade alongside tech majors such as Apple, Microsoft, Amazon, and Tesla. Do you think, if the trend picks up, we could see FAANG T and C also getting added very soon to the famous acronym?
A) We are seeing investors go beyond FAANG companies, it was popular initially when we launched and when investors just wanted to get some global exposure. These days, investors are looking way beyond these stocks and at companies which have a potential to give them a good upside both from short term and mid-term perspective.
People are also looking at speculative play which was seen during the entire Gamestop and AMC saga.
The kind of interest we are seeing for new-age companies during their respective IPO's like Airbnb, Snowflakes, DoorDash, Coinbase, etc. I firmly believe other new-age acronyms would be created.
Q) Did you see any interest on the platform ahead of the listing from India investors to invest in the cryptocurrency exchange?
A) There was a huge demand from the Indian investors. Just like the IPOs of Snowflake or Airbnb, we are witnessing a 30-40% rise in our support requests for Coinbase listing.
Indian investors are looking at thematic access to cryptos. Also, post listing on Wednesday, Coinbase was one of the top traded stocks in the Stockal Platform.
We were also trending on Twitter with #coinbaseonstockal around the time the US market was opening.
Q) Coinbase could be a volatile share if we consider how cryptocurrencies behave. Is there any safeguard for investors which they could use as a hedge?
A) According to the company’s regulator filing, due to the highly volatile nature of the crypto economy and the prices of crypto assets, the operating results will continue to fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader crypto economy.
As much as 56% of all trading volume came from only two crypto currencies, Bitcoin and Ethereum, which poses a significant risk if interest in either of these currencies was to fall.
However, I don’t think there would be a high correlation between crypto movement and Coinbase stocks. Yes, at the moment Coinbase is riding on the entire crypto and retail investing wave, but once the tide settles, it is the overall business that will drive the value of the company.
Having said that, Coinbase numbers are absolutely brilliant. The quarterly results have already shown a surge of 847% i.e. $1.8B revenue). For the quarter ended 31 March 2021, Coinbase reported $1.8 billion in revenue compared with $1.3 billion for all of 2020.
As of March-end, the company had more than 56 million verified users with a quarterly trading volume of $335 billion. The total worth of assets on the platform reached $223 billion, representing 11.3% crypto asset market share.
The timing of the listing itself is very good for the company as it has various positives supporting it and we are also in the midst of a bull run and IPO craze globally.
But, for the investor, it might not be a great time as some of these companies might be over-valued. As always in the stock market, do your research and hold on to your investments from a long-term perspective.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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