Onchain Insights
Sep 26, 2023

$75B+ Coinbase's Direct Listing Will Lead to Repricing of BNB

$75B+ Coinbase's Direct Listing Will Lead to Repricing of BNB

What is Binance?

Binance is the world’s largest cryptocurrency exchange with daily volumes averaging $20B+. Its competitors include Coinbase and Kraken, though Binance is by far the market leader for spot and derivative activity.

BNB is the native token of Binance, the world’s largest crypto exchange. There are various ways to buy cryptoassets, an ETP is an option amongst many while a crypto exchange is another. BNB can be seen as a proxy for the exchange’s success the demand for users and market makers for using its platform — as we detail in our research report.

Since the start of the year, BNB has returned 588% compared to 78% for Bitcoin due to one main reason: the upcoming direct listing of its competitor, Coinbase and its possible $90B+ valuation repricing comparable exchanges such as Binance. In light of this, the 21Shares BNB ETP (BNB | ISIN: CH0496454155) offers the best way for investors to get access to BNB in a safe, simple, and regulated manner.

Why does it matter?

BNB is likely undervalued compared to its direct competitors let us explain why.

The looming Coinbase’s direct listing will effectively make the first crypto business of note to go public in the United States. With a direct listing, the company will not issue new shares with an underwriter involved but will sell existing and outstanding shares on a public exchange. This liquidity event will raise more awareness for Coinbase, Bitcoin, and the rest of the crypto market and will probably put the US-based exchange amongst the world’s top 15 FinTech apps. A Coinbase investor thinks the San Francisco company could price its shares at an implied market value of $70 to $100 billion. Coinbase pre-ICO contracts on the crypto exchange, FTX, are currently trading between $350 and $400, which implies a valuation of over $90B.

However, did you know that Coinbase is not the only crypto company an investor can get exposure to on a stock exchange? Binance’s token, BNB, has been wrapped into an ETP in Europe via the 21Shares BNB ETP (ABNB) since October 15th, 2019. ABNB is listed in the SIX Swiss Exchange and BX Swiss with over $214 million in assets under management as of February 19.

Binance is the leading crypto exchange in spot volumes as you can see in the table below. BNB has a market value of $39 billion with a fully-diluted valuation of $46.2 billion while the exchange is processing almost five times (10x) the daily trading volumes of Coinbase. With a ten basis points (0.1%) standard trading fee, Binance likely does at least $10 billion in trading revenue. This figure discounts other revenue lines such as derivatives ($47 billion daily volume) or lending products. For the former, Binance’s futures volumes are 1.5 times the 24-hour volume of its closest competitor, Huobi. To put this in perspective, with current spot volumes, Binance is more significant than the New York Stock Exchange’s equity volumes (NYSE).

As such, a likely $90B+ valuation for Coinbase upon its direct listing will likely lead to a sizeable repricing of BNB given Binance’s role as the market’s largest crypto exchange and the fact that the performance of BNB is closely tied to the success of Binance. Given BNB’s current valuation of little above $39B, this suggests a significant upside for those who access exposure to the asset through the 21Shares BNB ETP (ABNB | ISIN: CH0496454155).

How can you get exposure to BNB and Binance in a regulated way?

The 21Shares BNB ETP (ABNB | ISIN: CH0496454155) seeks to track the investment results of Binance Coin (BNB). With a current AUM of over $200M, the ETP is safe, easy, and offered within a regulated framework. Since inception, the ETP has returned 1275% for investors and the product is available at your favourite broker on the SIX Swiss Exchange and BX Swiss. Learn more here.

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