We previously presented an article on Arab Bitcoin on the possibility of buying “Coinbase” shares in the form of digital currencies on the FTX platform.
How to buy shares of Coinbase cryptocurrency before the IPO?
After its completion, the cryptocurrency trading platform FTX launched this morning the “Coinbase” stock in the form of a digital currency called “CBSE”.
This digital currency, represented by the "Coinbase" share, has seen a trading volume of more than $ 2 million in the past few hours and is currently trading at a price of $ 235.
The popularity of the new digital currency is among traders looking to bet on the higher valuation of the upcoming Coinbase IPO.
The “Coinbase” share is not the first to be offered in the form of a digital currency and is traded on the cryptocurrency exchange platform. Rather, the FTX platform has already listed many stocks of international companies in the form of digital currencies, including Tesla, Facebook, Google…
And for those who ask about how to represent the value of these digital currencies, they are based on the value of the real shares supported by the German financial institution "CM-Equity", which in turn owns the actual shares represented by the digital currencies.
Coinbase is currently valued at $ 8 billion, with many rumors emerging that its market value ranges from $ 40 billion to $ 80 billion.
While the company itself does not have physical shares in the market yet, pre-IPO cryptocurrencies are a speculative bet that will convert to equivalent stock prices at the end of the first day of the Coinbase's actual launch, and CBSE coins will expire after that. .
This means, hypothetically, that if traders buy $ 10 of CBSE today and Coinbase shares trade in the public markets at $ 15, investors are likely to gain 50% on their initial investment.
Whereas, if stocks trade at any value below $ 10, traders will lose.
In the event that an initial public offering is not conducted at all, the digital currencies will expire on June 1, 2022, according to the offering document.
FTX reported that CBSE's maximum market value is limited to $ 250 million.
In addition, the volatility of these currencies is limited to 20%, which means that "CM-Equity", the representative party of these cryptocurrencies, can close positions at its discretion.
The FTX platform has warned that “CBSE” is a high-risk investment.