Coinbase shares began trading Wednesday in what's expected to be a watershed moment for Bitcoin and cryptocurrencies.
The company set a reference price of $250 a share for its direct listing on the Nasdaq. Speculation that it could open at a much higher price, given the massive interest, proved correct: It began trading at $381 a share and rapidly leapt to $429 valuing Coinbase at more than $100 billion, before retreating to $328.28 by the end of trading.
Coinbase Chief Operating Officer Emilie Choi spoke to Protocol Wednesday morning while waiting for the trading to begin, after a somewhat restless night before the big day.
"I'm always scared that my alarm is not gonna go off for some reason," she said. "I feel like I'm still in high school. As it happened, of course, I woke up naturally because I was so excited."
This interview has been edited for clarity and brevity.
This has been described as the Netscape moment for crypto, a turning point for Bitcoin and other digital currencies. How do you see it?
We're going public for an internal and an external reason. We're going public internally because we feel like we have the pieces in place to be able to go public, whether that's the financial foundation, the management team, the employee base that will help us take this to the next level.
And then externally, there are two reasons. One is we want to be able to have a public mark on our stock price because it helps us do more and more M&A. That's the whole reason I came to Coinbase in the first place. We're going to be using acquisitions as a way to accelerate all the different things that we wanted to do.
The second thing is, we believe that this is the moment to shine a light on crypto in the world. If our public listing is a small part of that, we're honored to be able to do that.
Why is M&A critical, and what should we expect from Coinbase going forward now that you're a publicly-traded company?
We have been incredibly active in M&A and we will continue to be even more active in M&A. And the reason for that is that there's so much innovation happening in the crypto ecosystem, and we can't possibly do it all in-house. I think one of the relics of a bad company is a "not invented here" syndrome. [CEO] Brian [Armstrong] has always been one of those people who's like, "Hey, if they're coming up with better ideas on the outside, more power to them. We want to bring them in and we want to bring their innovation in-house."
We've done a number of acquihires. We did Xapo, which helped put us in this position of being the No. 1 crypto custodian in the world. We did Tagomi, which helped us offer a prime brokerage to the world. And most recently we did Bison Trails, which allows us to offer crypto developer tools and infrastructure to help folks build on this ecosystem.
What is your biggest fear today and in the next three months in terms of how the way your company operates changes?
I want everybody to be in this for the long term. Crypto, as you know, has cycles, and whether you're an investor, whether you're a new employee, I want us not to be focused on the short term. I want us to think about things much in the way Amazon did. Nothing matters right now day to day. What matters is that everything is long term, that we're thinking about the trajectory of the company: How do we build the foundation that helps the technology scale, that helps customer service scale and so on and so on. I want to make sure we're hiring the people and grooming the right set of investors who can kind of help think about the long-term vision.
Crypto is still widely seen as an investment tool. When are people going to use Bitcoin or Ether to buy groceries or a cup of coffee?
We think about crypto being a form of money or investment, crypto being a new form of financial system around this new asset class, and then crypto being the new form of an app store, if you will. The thing with the app store analogy is that we don't know which applications are going to be the ones that dominate, in the same way that back in the day when Apple released the App Store, you couldn't have told me, "I know gaming is going to take off, I know messaging is gonna [be big]," whatever it is. And that's the beauty of being a platform. We want to offer the absolute best crypto platform to the world. We will let the activity kind of take place and it will flourish if we offer the right set of tools and infrastructure for that community. What happens there, we don't know, and we don't know the timing, but we think that there's something huge there.
Volatility is still an issue, especially for Bitcoin. What do you tell investors or business owners who worry about that?
As with every major technology shift, you're going to have these waves of volatility in the same way that you saw kind of the things happen when the internet was pioneered. So you have to be comfortable that when you have these tectonic shifts in technology, that there's going to be volatility. If you look at the short term of Bitcoin, if you look at the day to day of Bitcoin or any of these other crypto assets, it's going to look volatile. If you look at the long-term trajectory of Bitcoin, it is up and to the right. So you have to have the mindset of being a long-term investor or employee in our case. We want people who think about this as a generational thing, as opposed to anything that could be short-term thinking.
Two months ago Federal Reserve Chairman Jerome Powell said developing a digital dollar is now a priority. What's your reaction to that?
Digital currency and the digital dollar, those are all things that the government should actively be pursuing. The ship has sailed in crypto. Crypto is a phenomenon, whether or not anybody wants it to be or not. It's here to stay. What I would say is regulators should be embracing it and leaning into it, because we could either help it flourish here in the United States, or we could over-regulate it, or mis-regulate it, and a lot of that innovation will shift to other parts of the world. We have to have this mindset of embracing it and understanding it as opposed to in any way over-regulating it.
What is the kind of regulation that worries you?
If you think about a lot of the kind of flippant comments about [anti-money laundering], right, it's funny to me because if you take a step back, how do I know what you're doing in cash? And so I just think there's a lot of misperceptions about what [crypto] is being used for. There's just foundational education I think that needs to happen to make folks understand that this is taking us into the 21st, the 22nd century. Programmable digital assets — that feels like something that folks should be embracing.
That's a good point to raise. Did you watch the series "Queen of the South" where a drug cartel started using cryptocurrency to launder money? Like you said, there's a perception that for money laundering, it's attractive.
And it's funny because the former CIA director Michael Morell said that that's misinformation. It turns out that crypto has less illicit transactions than cash. If you dig into them and you actually want to approach this with an open mind, you will see that this is actually much better in many ways for understanding how transactions are working in aggregate.
You started your career around the time of the dot-com boom, which turned into the dot-com bust. You also went through the 2007 to 2009 recession. As Coinbase enters this new phase, what lesson is top of mind for you based on those experiences?
Stay the course. Relentlessly focus on the mission, and everything else will solve itself.
The company became controversial a few months ago with a blog post from Brian Armstrong which suggested that Coinbase is not interested in being socially conscious. How has that impacted your culture especially given the reported departures?
We have clarity now. We're being open about what we are and what we're not. And we are focused on the mission, which is something that unites us, not divides us. And so whether we're recruiting or managing our wonderful employees or whatever, there's that clarity now. We understand the folks that left. We wish them all the best and we hope they had a great experience here. And for the folks that are coming in, they know what we're about. And if they're aligned with that, they're going to thrive here.