Shares in cryptocurrency exchange Coinbase Global (COIN) rose as much 10% in pre-market trading on Thursday morning, a day after the company's historic stock market listing in New York.
Investors were reacting to news that three funds at Ark Invest, run by Cathie Wood, bought 749,205 shares of Coinbase on the first day of its IPO. Wood and her firm Ark are both highly regarded on Wall Street.
Coinbase was briefly worth over $100bn (£72bn) when it debuted on the Nasdaq on Wednesday. Shares ended their first day of trading at $328.28, below the opening price of $381. Based on closing price, Ark's shares are worth about $246m.
“Coinbase’s IPO initially attracted large interest from retail buyers, hiking the price from its initial $250 to over $400, before settling between the $320 to $350 mark where it is understood that institutional demand is growing," said Stephen Kelso, head of markets at ITI Capital.
"As a result, I suspect that there will be a strategic reallocation out of mega-tech into Coinbase, alongside other crypto market plays from some of the big players, foreshadowed by Ark Invest’s $246m buy up on day one."
Coinbase's stock market debut signalled a history moment for the industry but Chris Beauchamp, chief market analyst at online trading platform IG, described the stock market debut as "rather uninspiring". Bill Blain, a a strategist at Shard Capital in London, said it was "a muted success," given shares closed below their opening price.
"Many have opined that today's high-profile crypto listing is contributing to the rise we're seeing in digital currency prices, and that may be so," said Mati Greenspan, founder of Quantum Economics. "But I would opine that the inverse is probably more true."
"Coinbase isn't pumping bitcoin. Bitcoin is pumping Coinbase. Sure, there may be some out there who are buying today feeling more comfortable about the future of the crypto space now that one of the world's largest exchanges is a publicly traded entity, but let's not forget that Coinbase specifically chose the timing of their listing to coincide with the bitcoin bull run, and not the other way around."
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