Digital currency, once mocked as a tool for criminals and reckless speculators, is sliding into the mainstream.
On Wednesday, digital or cryptocurrencies took their biggest step yet toward wider acceptance when Coinbase, a start-up that allows people to buy and sell cryptocurrencies, went public. Coinbase shares began trading at $381 each, up 52 percent from a reference price of $250, eventually closing at $328.28. That gave the company a valuation of $85.7 billion based on all its outstanding shares, more than 10 times higher than Coinbase’s last private valuation.
Call it crypto’s coming-out party. Coinbase, based in San Francisco, is the first major cryptocurrency start-up to go public on a U.S. stock market. It did so at a valuation that rivaled that of Airbnb and Facebook when they went public.
Cryptocurrency advocates — many of whom expect the technology to upend the global financial system — are celebrating the watershed as vindication of their long-held belief in their cause’s potential.
Coinbase’s listing answers the question “Is crypto a real thing?” said Bradley Tusk, a venture capital investor whose firm, Tusk Venture Partners, backed Coinbase. “Any industry that can launch an I.P.O. of this size is without a doubt a real thing, and it’s proven by the market.”
The stock market debut of Coinbase, a start-up that allows people to buy and sell cryptocurrencies like Bitcoin, is a watershed moment for digital money.
It also threatens to lock in a technology with an astonishing environmental footprint.
Cryptocurrencies use blockchain technology, which relies on specialized computers racing to solve complex equations, making quintillions of attempts a second to verify transactions. It’s that practice, called “cryptomining,” that makes the currencies so energy-intensive.
Researchers at Cambridge University estimate that mining Bitcoin, the most popular blockchain-based currency, uses more electricity than entire countries like Argentina do.
“All this accounts for so little of the world’s total transactions, yet has the carbon footprint of entire countries. So imagine it taking off — it’ll ruin the planet,” said Camilo Mora, a climate scientist at the University of Hawaii at Manoa (emphasis added).