The decision by ICE to offload its stake was strategic and came at a time when Coinbase reported Q1 revenue of $1.8 billion amid the ongoing crypto market boom.
Intercontinental Exchange Inc (NYSE: ICE), the owner of the New York Stock Exchange has revealed it has sold its stake in the recently listed cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN). As revealed in the company’s earnings call on Thursday, Chief Financial Officer, Scott Hill said the company’s 1.4% stake was sold off for $1.2 billion in gross proceeds.
The Intercontinental Exchange is one of the early investors in Coinbase and is now coming off as one of the biggest beneficiaries when the trading platform debuted on the Nasdaq a few weeks ago. As noted by Scott, the selling of the stake generated a net profit of $900 after taxes. This fund is billed to be used to reduce the company’s debt position at the end of the First Quarter.
The ICE executive also said the company’s pro forma leverage, or total indebtedness rate, would have been closer to 3.6x compared to 4.2x when ICE acquired Ellie Mae, a mortgage-focused software company at the end of the third quarter of 2020.
Intercontinental Exchange has been paying down its debt even before the Coinbase stake was sold out according to incoming CFO Warren Gardiner. He submitted that the revenue generated from the Coinbase sales offered additional flexibility for the company as it seeks to navigate the rest of the 2021 fiscal year.
“We are down to about 3.6 leverage, the target is about 3.25, where we can start to think about buying back stock,” he noted.
Per the company’s performance in the market, investors appear to be wary of the Coinbase sell-offs with ICE shares closing 1.17% to $117.68 on Thursday.
Best Time for Intercontinental Exchange to Ditch Coinbase?
Coinbase made its public debut with its shares trading at $381 each. The first trading day pushed the price back down to a close of $328.28 per share, and a market cap of $85.5 billion. At this valuation, Coinbase had a bigger valuation than the Intercontinental Exchange. It ranked as the most valuable exchange in the United States.
The decision by ICE to offload its stake was strategic and came at a time when Coinbase reported Q1 revenue of $1.8 billion amid the ongoing crypto market boom. The digital currency exchange’s share price is fast retracing, closing yesterday’s session with a price valuation of $294.77 per share.
Coinbase stock is tied closely to the potential growth or performance in the global cryptocurrency industry featuring Bitcoin (BTC) and Ethereum (ETH). Should the upward trajectory being reported since the turn of the year continue, with a corresponding impact on the share price of Coinbase, the Intercontinental Exchange may have to pay much more for the shares they lost whenever the buyback move is made.
This loss may be cushioned as ICE-owned trading platform Bakkt is also billed to go public through a merger with Victory Park SPAC
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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Mike Novogratz’s Galaxy Digital Announces Acquisition of Crypto Custodian BitGo
11 hours ago
May 5, 2021
In a major development, crypto investment management and financial services provider Galaxy Digital Holdings announced the acquisition of popular and leading crypto custodian BitGo. This acquisition adds a feather to the cap of Galaxy Digital that seeks to offer a full-service platform for institutional players. Earlier we’ve already reported that there were such rumors. And […]
In a major development, crypto investment management and financial services provider Galaxy Digital Holdings announced the acquisition of popular and leading crypto custodian BitGo. This acquisition adds a feather to the cap of Galaxy Digital that seeks to offer a full-service platform for institutional players.
Earlier we’ve already reported that there were such rumors. And now they have got confirmed.
Speaking about the acquisition, Wall Street veteran and Galaxy Digital founder Mike Novogratz said:
“The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology. The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”
The article will be updated with new information soon.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Dogecoin Price Jumps Ahead More Than Half a Dollar
23 hours ago
May 4, 2021
Within the past 24 hours, we have seen Dogecoin (DOGE) jump ahead and grow over 30% in price. With DOGE climbing the crypto ladder at a rapid pace, in the early hours of Tuesday, the coin price reached a new milestone and crossed the $0.50 barrier.
The value of Dogecoin was $0.389421 and reached $0.541900 overnight–a 39% increase in price. As Dogecoin continues to grow in the crypto market, the digital currency has taken observers by surprise who have mocked and joked about coin–an intention by the creator himself. Despite the ongoing jokes, Dogecoin has had the last laugh so far, as it turns out to be one of the most profitable jokes in the crypto realm, as evidenced by the phenomenal surge in just 4 months.
Taking a quick look at how far Dogecoin has progressed since Jan 1, 2021, the coin valued at less than one cent at the time. Now, approaching May 2021, the coin has grown 10,922% and sits at just over half a dollar. However, this rapid turn of events for Dogecoin also points to the coin’s 50% price drop back in mid-April–both signaling to investors to be aware of the quick changes in the crypto market. Influencers also have the ability to alter the market as we observed earlier this year, in February. Elon Musk shared his thoughts on the crypto coin on his social media platform, which reduced almost 25% of Dogecoin’s growth within a few hours.
Dogecoin Popularity Surpasses Tether (USDT)
With Dogecoin’s current market capitalization of more than $52 billion, the cryptocurrency company has surpassed Tether (USDT), Twitter, and U.S. car manufacturer Ford. AssetDash’s data suggests that Dogecoin’s empire is an estimated $52.5 billion, which is $400 million higher than that of Tether as it is currently sitting at $52 billion. Ford’s market value is approximately $45.1 billion whereas Twitter is sitting at $43.1 billion.
There has been speculation that the coin surged because of Elon Musk’s upcoming appearance on Saturday Night Live as a guest host.
To learn more about Dogecoin’s previous successes this year, click here.
Tether Zips Past $50B and Heats Up the Crypto Market
2 days ago
May 3, 2021
Tether (USDT), the world’s largest stablecoin, just reached a market capitalization of $50 billion at the end of April 2021. A definitive sign that the cryptocurrency bull market is warming up, the Tether supply has grown by more than a factor of 10 over the last 12 months. Calculating the breakdown, that roughly accounts for 25% growth in the span of a month.
CTO of Tether Paolo Ardoino, has commented on this success stating, “Crossing a market cap of US$50 billion represents an incredibly important milestone for Tether.” Furthermore, he acknowledged that the success of Tether was a blueprint for a future in the banking system and as a Central Bank Digital Currency. Tether has gained recognition for its pivotal role for the future of digital currency. As the first stablecoin in the cryptocurrency industry, USDT holds a unique position as it is currently the most liquid and often used dollar-pegged token on the market. Additionally, USDT remains one of the top quoted currencies for Bitcoin and Ether trading pairs.
Last month, USDT made up approximately 66.1% of the overall stablecoin market. In comparison, the USD Coin (USDC) is the second-largest stablecoin and is worth just under $11 billion. There has been some conversation and concerns in the crypto community regarding Tether and speculation about its reserves. However, Tether was quick to put concerns to a rest and an assurance report from Cayman Islands-based Moore Cayman provided confirmation that USDT tokens are, in fact, fully backed by reserves.
Not too long ago, Tether had settled an $18.5 million fine with the Office of the New York Attorney General. Allegedly, Tether had misrepresented the degree to which the USDT coins were backed by fiat collateral. Fiat-backed currency is government-issued or government-supported currency. As such, Tether agreed to produce periodic filings, which now proves its reserve status. Thus, the assurance report comes a month after the settlement agreement.
For more information on cryptocurrency growth and upcoming opportunities, click here.
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