Coinbase Makes Its Debut—and Bitcoin Arrives on Wall Street
Physicists are constantly rethinking how bubbles burst. It’s one of those nagging problems in physics, deceptively simple, like working out the forces that keep a bike upright. The problem is that while bubbles pop around us all the time, those pops occur in a fraction of a second, making the basic principles hard to glimpse. But a few years ago, using exceptionally quick cameras, scientists noticed an unusual phenomenon: bubbles, when they rupture, form many other bubbles—“daughters,” they call them—that encircle the parent. In other words, a bubble contains innumerable others waiting to be created and destroyed in an instant.
How many bubbles lie in wait during this speculative spring? In recent months, money has floated away from reality and entered new realms of weirdness: nonfungible tokens, memecoins, and stonks. Ask an economist why, and they will tell you money has had few places to go. During the pandemic, a lot of money has been printed. For many people, it went straight to groceries and rent; but others were already flush and seeking returns. Money couldn’t be left in cash, because cash doesn’t pay, and inflation loomed; bonds aren’t returning what they once did. So at first stocks were the sensible choice, especially tech stocks whose soaring values could be rationalized with the remote work year.
But logic can only carry a valuation to so many trillions of dollars. So why not invest in bitcoin? People piled in, and the value rose to dizzying, and perhaps worrying, heights, recently surpassing $60,000, and helping along those NFTs and Dogecoins. Even many of those investors fear a bubble, so they are eager for the debut of Coinbase, the cryptocurrency exchange seen as a safer, friendlier exposure to the crypto world. Today, Coinbase will begin trading on the Nasdaq as a $100 billion company, at least on paper, among the most valuable debuts in history and roughly on par with Facebook in 2012. Surely this is solid ground.
