Coinbase, the largest crypto exchange in the US, is being valued at about $8 million based on a deal that is almost complete. This makes Coinbase the highest-valued startup in the country, which makes Michael Novogratz think that the crypto market is going mainstream. According to sources that spoke with tech portal Recode, Coinbase is currently negotiating with Tiger Global regarding an investment of about $500 million. Tiger Global, a New York-based investment company, has shown in the cryptocurrency industry, though it didn’t want to comment on the deal with Coinbase.
The valuation of Coinbase has jumped within this year. Last summer, the company was valued at about $1.5 billion, but the top cryptocurrencies, including Bitcoin, weren’t trading at their peak then. According to the current negotiations with Tiger Global, the crypto exchange is estimated at about $8 billion, the same figure that Coinbase gave when it valued itself when acquiring Earn.com.
Billionaire hedge fund manager Michael Novogratz said that Coinbase’s multi-billion dollar valuation demonstrates that the crypto space cannot be compared to the “tulip mania” from the 17th century. As per CNBC, Novogratz said on Tuesday during the Economist's Finance Disrupted conference in Manhattan:
“Here's the poster child of the crypto space worth $8 billion — that's a real company, and Tiger's not a flake of an investor. These are smart, savvy guys.”
Novogratz’s remarks hint to the crash of the cryptocurrency market, which has lost more than half of its value since the beginning of this year. Bitcoin is currently trading at around $6,500, while in mid-December of last year it was peaking at almost $20,000. Other top coins, such as Ripple’s XRP or Ethereum’s Ether, have shown an even worse performance.
However, the former Fortress hedge fund manager is confident and expects the market to revive. Novogratz, who founded crypto merchant bank Galaxy Digital, said that Bitcoin would attract major institutional money by 2019.
“You're going to see pensions and endowments come in, or I will literally come back next year, and wear no shoes,” he noted.