Cryptocurrency platform Coinbase, which encompasses a crypto exchange, a broker and an online storage facility, has been valued at $8 billion ahead of a possible takeover by Tiger Global, a deal which ex-hedge-fund titan Michael Novogratz says makes Coinbase the “poster child of the crypto space.”
According to Michael Novogratz, the pugnacious, bullish former Fortress hedge fund manager and staunch Bitcoin advocate, this week’s multi-billion dollar valuation of Coinbase lays to rest once and for all the connection between cryptocurrency and Dutch tulips that has been brought up by crypto-critics since late 2017. At The Economist’s Finance Disrupted conference in Manhattan on Tuesday, Novogratz said:
“Cryptos are not tulips. 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!”
Coinbase are in the middle of intense negotiations with investment firm Tiger Global, who – according to technology website Recode and Dow Jones – value the crypto exchange at $8 billion. The deal would make it one of the most highly valued U.S. start-ups ever.
News of the potential Coinbase deal dispels crypto-critics who have long held on to the notion that the likes of Bitcoin is simply the 21st century’s equivalent of Dutch Tulip Mania. In 1673, the Dutch tulip market crashed, historically the first example of a market bubble expanding to the point of over inflation.
Tulips had been introduced to Holland several years earlier, and proved massively popular. Pretty soon, demand had outstripped supply, with people paying as much as 4,500 guilders for a particularly beautiful bulb. A skilled professional worker in Holland at that time would be earning 300 guilders PER ANNUM. When vast numbers of tulips suddenly became available, the market crashed, ruining many wealthy businessmen overnight.
Bitcoin & Co Built To Last
By the end of 2017, cryptocurrency prices across the board were at record highs, and the market seemingly had only one place to subsequently go – down. By February 2018, the combined cryptocurrency market had indeed crashed, with almost 50% of its value wiped out. However, the likes of Bitcoin, Ethereum, Ripple, EOS, Bitcoin Cash and Litecoin have soldiered on, taken a few knocks, but emerged stronger and in good shape, and everyone connected with the crypto industry believes that 2019 will be an exciting time.
Mike Novogratz, whose cryptocurrency-focused merchant bank Galaxy Digital went public on a Canadian stock exchange in August, predicts that much-needed major institutional money will be pouring into Bitcoin and crypto in general by next year. As Mike himself says:
“You’re going to see pensions and endowments come in, or I will literally come back next year, and wear no shoes.”