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Cryptocurrency's Coming Out Party: Interview with John Ladyzinski on Coinbase IPO

JACK STONE TRUITT, BYLINE: Cryptocurrency reached another milestone yesterday when Coinbase listed its shares on the NASDAQ stock exchange. Coinbase is a marketplace where investors can buy and sell cryptocurrency like Bitcoin. The company ended its first trading day with a valuation of $85 billion dollars. More than ten times its value when it was still private. John Ladyzinski is an assistant professor at NYU. John, thank you for joining us.”


TRUITT: So people are really excited about this. Why is it such a big deal for cryptocurrency?

LADYZINKSI: Well, like you said, it made stock market history yesterday. As you know, Coinbase is one of the largest digital exchanges in the industry. And while the market has seen historically seen a lot of fundraising events around the crypto industry, this is the first IPO of a company specializing in cryptocurrencies on the US capital markets. And that's a significant development.

TRUITT: And does this make things easier for people to invest in cryptocurrency? Does

it make it a bit more stable or legitimize in some way? What does it mean for cryptocurrency itself?

LADYZINKSI: It’ll certainly make it easier for people to get in and sort of dip their toe in the cryptocurrency world. They specialize in keeping your information offline in something called cold storage.

TRUITT: How does Wall Street View cryptocurrency right now?

LADYZINKSI: Well, if you ask 10 different Wall Street, guys, I'm sure you're gonna get 10 different answers. crypto currencies, in general, is an alternate currency. You don't see the US or really any major country out there having two different currencies. But there are countries out there that are, you know, have very unstable currencies. Venezuela, for example, has 1,000,000% inflation, try to get your arms around that. Where can they go to put their money? How can they they trade or buy things one day without their currency being worthless the next day? Well, that's where that's where cryptocurrency might come in. So I think that there are huge benefits to it. Maybe not so much in the US or in Europe as far as being an actual currency, because of its volatility, but certainly elsewhere in the world.

TRUITT: And so you mentioned the volatility, I imagined that the stock itself will be tied to the volatility of the currencies being traded on Coinbase itself. Does that pose a problem for investors? Or is it something people are concerned about?

LADYZINSKI: Well, Coinbase makes their money through transaction fees. And it's mainly coming from two of the major cryptocurrencies, Bitcoin and Etherium. So if anything were to happen to those particular cryptocurrencies, a price drop or fewer transactions, it would definitely negatively affect Coinbase. But if things continue to go to go the way they are now,

things look bright.

TRUITT: And is there anything kind of at odds with Coinbase is self stated mission of an open financial system for the world, but now being listed on something like the NASDAQ, and kind of a lot of cryptos ethos of, you know, being free from those kinds of regulations in general?

LADYZINSKI: I personally think regulations are good for the crypto industry. I mean, the more investor protection you have, I think it's the safer place it becomes for investments, for individuals. President Biden just announced that he was having someone look into having more cryptocurrency regulations. And like I said, I think that's only a good thing.

TRUITT: And do you have any sense of as to why now, why Coinbase decided to go public in this moment?

LADYZINSKI: Well, yeah. They're actually going public during a super bull market for cryptocurrencies, I mean, bid climb has climbed from under $30,000, at the end of 2020. And it's almost $64,000 today. So the amount of run up in that the amount of money that that Coinbase has made in the first quarter alone, made just perfect time for them to go public.

TRUITT: Alright, John Ladyinski is an assistant professor at NYU. John, thank you so much for your time today.

LADYZINKSI: Thank you so much for having me.

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