Money Reimagined: Can Coinbase Live on The Street?

Saturday 17 April 2021, 5:18 AM AEST - 3 weeks ago

Years from now, well talk about the period before Coinbases listing and the period after it.

The raucous arrival of the biggest crypto startup onto Wall Street Wednesday has unleashed an explosion of self-perpetuating interest in the crypto world. Pundits now expect wider adoption, unleashing capital and feeding even more new ideas into the crypto innovation machine. Already, as youll see in the Relevant Reads section of this weeks newsletter, the buzz is driving another buying frenzy across the crypto markets.

That Coinbase buzz sets the tone for both this weeks column – which looks at how the companys status as a listed company could pose challenges to how easily it can innovate – and for the podcast. For the latter, Sheila Warren and I were joined on the day of Coinbases listing by Wall Street Journal reporter (and my co-author) Paul Vigna and CoinDesk Director of Research Noelle Acheson to discuss the myriad ways the Coinbase listing is going to challenge Wall Street and vice versa.

Have a listen after reading the newsletter.

Coinbases Nasdaq listing has unlocked tens of billions of dollars in new wealth for its founders and early investors, but the move comes with a catch: decision-making is now constrained by the higher public scrutiny and quarterly performance expectations all listed companies face.

Having just leapt into the ranks of the worlds 100 richest people, CEO Brian Armstrong no doubt believes thats a price worth paying. Hes probably also looking at the renegade behavior of crypto-friendly CEOs at other public companies, such as Teslas Elon Musk and MicroStrategys Michael Saylor, and concluding he still has plenty of room to maneuver.

But the real issue is that Wall Streets regulatory and self-regulatory system of reporting and compliance – introduced over decades by both government and self-regulatory bodies to protect the interests of minority shareholders and the general public – is now broken. Relentless monetary expansion, which has indiscriminately boosted all stocks in dollar terms, has reinforced a pre-existing problem where executives are rewarded for short-term share price gains rather than for pursuing long-term growth.

When you represent an industry that challenges the status quo of centralized finance, its ...

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