Peter Smith, Blockchain.com Co-Founder & CEO joins the Yahoo Finance Live panel to discuss the public debut of Coinbase on the Nasdaq.
- Welcome back to Yahoo Finance Live. We are still waiting for that trading to begin for Coinbase shares, now indicated to open at $375 a share for this direct listing. If this price holds, we're looking at a valuation of $100 billion. It would make it one of the 85 most valuable US companies on its debut. So of course, as soon as those shares begin trading, we'll bring that to you.
But let's bring in Peter Smith, Blockchain.com Co-Founder and CEO. Peter, what are you thinking as you continue to see these prices push higher? Potential, or I guess you could argue, it's a bit of a competitor for you.
PETER SMITH: Yeah, they're definitely a competitor. That said, the funny thing in crypto is we're sort of all in this together. And so we're huge fans of Coinbase. And wishing them really well in their opening day. I think they'll definitely break through 100. I think you're going to see it happen today, and I think they'll be traded above 100 by the end of the week.
- Yeah, market cap fully diluted, $98 billion right now if the price holds. And we're kind of looking into the way that competition is set to evolve. Of course, you can say you guys are all in this together. That may be true. I like the spirit of cryptocurrency, everyone being together on this. But when we look into, maybe, where those fees might go, it does seem like a lot of people are talking about a potential race to the bottom when it comes to transaction fees, the way that Coinbase makes its money.
Talk to me about how this space might be different than what we've seen in traditional stock exchanges and brokerages, and the way that that could play out.
PETER SMITH: Yeah. So I've been talking about how fees would go lower for six, seven years. How fees can never remain this high in a normal financial market. And the fees are higher at Coinbase today than they've ever been. And so I've been wrong about that for at least half a decade. And I'm not sure when, or if, I'll ever stop being wrong about that. Coinbase has built an incredible business around convenience, and being a mass market option, and it may never correct. That may always be something that they're able to capture a huge premium for.
That said, you do expect everything to revert to rational, efficient markets eventually in finance. But, you know, the future is hard to predict in crypto. I think one of the things that I've heard said a couple of times on your program this morning is how early we are in crypto. And that's definitely something that we believe at Blockchain.com. We think we're very early in the whole story of creating a financial system for the internet.
And then that financial system is going to be absolutely massive, and you're going to see the first sort of global scale companies backing that internet financial system. Coinbase is going to be one of the most important companies in that segment.
- How big of a lift do you see this listing providing to your company? I mean, to your point, you are competitors, but we have seen whenever one company does well in this space, another does as well. Same thing with the cryptocurrencies. It's not just Bitcoin that's reached record highs, we've seen Ethereum go up as well. How are you looking at the knock-on effect from this listing today, at least for Blockchain.com?
PETER SMITH: You know, I think anything positive happening in the space is positive for us, first of all. I think that today, if it goes well, over the next couple of weeks, will demonstrate that there's real appetite in the public market for crypto companies, which will improve our cost of capital on the equity side, for sure. The reality is, though, that most crypto companies, the big ones, at least, became good businesses over the last two or three years. And when you become a good business, you're able to access a lot of capital in the market either way.
So I don't think it'll fundamentally change anything for us, other than creating the narrative, or proving the narrative out, that crypto companies can be an important part of the US stock market. Which I think is going to be really helpful for us in the long term. But at the same time, I think with Coinbase, one of the things that people always really track super closely is the sentiment around it. And so one of the things that we're most excited about is how positive retail, and the internet as a whole, is about the Coinbase listing. Because at the end of the day, we're very much more on the people's financial system than we are on the large institution side.