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Coinbase CEO Brian Armstrong. Photo by Bloomberg. Art by Mike Sullivan.

A New Way to Value FTX, Kraken; Another Ex-Regulator Joins a Crypto VC Firm

By  |  Jan. 13, 2022 5:15 PM PST
Photo: Coinbase CEO Brian Armstrong. Photo by Bloomberg. Art by Mike Sullivan.

Are crypto exchanges overvalued? Our colleague Martin Peers drew this conclusion about Coinbase, whose shares have fallen more than 30% over the past two months. While the stock may look cheap on the basis of its price-to-sales multiple, Martin wrote, the company may still be overvalued if you look at a different multiple: its market cap compared to the market value of all cryptocurrencies traded. That got us looking at other exchanges using the same measure. 

Coinbase’s market capitalization represents 2.4% of the market cap of all cryptocurrencies currently in circulation, according to The Information’s analysis. Comparatively, Nasdaq Inc.’s market cap is just 0.07% of the total market cap of all U.S. equities, and stock brokerage Charles Schwab has a market cap that is 0.38% of the value of all U.S. equities. 

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