Coinbase’s direct listing points to appeal of investor-driven markets

How Coinbase’s direct listing points to larger opportunity for markets priced by investors rather than market makers

5 min readApr 16, 2021


By Vanessa Malone

This week was big for the crypto community.

Bitcoin surged to over $60,000 on Wednesday, March 14th right before Coinbase (NASDAQ:COIN) became the largest crypto firm to go public on Nasdaq through a direct listing.¹

Coinbase ended its first day of trading at $328 per share,² giving the company a valuation of $85 billion.

We believe Coinbase’s direct listing reflects cryptocurrency and the greater blockchain industry’s major leap forward into mainstream finance.

Coinbase’s direct listing also points to a greater trend happening in capital markets with forward-thinking companies seeking non-traditional ways to go public.

Non-traditional IPO paths

Special Purpose Acquisition Companies “SPACs” have established themselves as viable alternatives to traditional IPOs offering many companies a more cost effective and less demanding path to go public.

The SPAC industry has exploded in 2021. SPACs have raised over $99 billion to date.³ In just the first three months of 2021, the SPAC market raised more than the entire year of 2020.The upside for SPACs is traditionally reserved for large institutional investors, just like with traditional IPOs. Quick aside: This is something Horizon and MERJ Exchange are hoping to change with tokenized SPACs on our upcoming digital stock exchange ‘Upstream.’

Direct listings offer yet another non-traditional IPO path.

Critics have argued that direct listings only make sense in niche cases but the latest success stories are suggesting direct listings could be a viable path. The SEC reported⁴ that favorable regulation in the U.S. and increased access to capital enables companies to push costly, traditional IPOs down the line. As companies continue to have access to resources that enable them to stay private longer, issuing new shares to raise more capital may no longer be the primary goal.

In a direct listing, instead of issuing and selling new shares to Wall Street investment banks and underwriters before the first day of trading, the company lets their existing shareholders (employees/ investors) sell existing shares on the free market at a price determined by supply and demand rather than market makers. There is no lock up period so shares are free to trade immediately.

This is an interesting difference as market makers are typically used to set the share price and drive liquidity. Coinbase and other direct listing success stories have shown that supply and demand can move the share price in a similar fashion without this intervention.

It leads to a bigger blockchain value of “taking out the middleman” in order to increase transparency and remove unnecessary hurdles.

The shift to order-driven markets

The Horizon team believes direct listings on true order-driven markets, or ‘investor-driven markets’ as we like to call them, are the future.

The Horizon-powered digital stock exchange ‘Upstream’ is an investor-driven market which differs from many of today’s exchanges and trading apps where pricing relies heavily on market makers.

Investors will be given direct access to the exchange via Upstream’s userfriendly trading app. From the app, investors will have access to a public orderbook with best bids and offers from other fellow investors transparently displayed in real-time on the Ethereum blockchain.

Similar to a direct listing, share price will be driven solely by market demand. Unique to Upstream, traders will control their securities directly on their smartphones and all transactions are biometrically protected. We believe these next generation features help us maintain a fair and accessible trading experience for issuers and their investors. Interested issuers can reach us at to receive listing materials.

Concluding thoughts

We believe that companies are going to continue to pave their own paths to go public. With the increase in public sentiment towards cryptocurrencies and the underlying blockchains behind them, we think that innovators will continue to blur the lines between this new technology and traditional capital markets.

About Upstream:

Upstream, a MERJ Exchange Market, is a fully regulated global stock exchange for digital securities. Powered by Horizon’s proprietary matching engine technology, the exchange will enable investors to trade shares in SPACs, high-growth startups, and other unique asset classes directly from the app Interested issuers can reach the team at

About Horizon:

Horizon is a fintech company that builds and powers global securities exchanges with an integrated suite of software for compliant issuance, management, and secondary trading of securities. Our in-house solutions combine Wall Street and Silicon Valley to power the next generation of securities offerings and trading in the U.S. and globally.


1 NY Times


3 SPACInsider

4 SEC Report


Upstream is a MERJ Exchange market. MERJ Exchange is a licensed Securities Exchange, an affiliate of the World Federation of Exchanges and full member of ANNA. MERJ supports global issuers of traditional and digital securities through the entire asset life cycle from issuance to trading, clearing, settlement and registry. It operates a fair and transparent marketplace in line with international best practice and principles of operations of financial markets. Upstream does not endorse or recommend any public or private securities bought or sold on its app. Upstream does not offer investment advice or recommendations of any kind. All services offered by Upstream are intended for self-directed clients who make their own investment decisions without aid or assistance from Upstream. Customers must comply with applicable law of their own jurisdiction. By accessing the site or app, you agreed to be bound by its terms of use and privacy policy. Company and security listings on Upstream are only suitable for investors who are familiar with and willing to accept the high risk associated with speculative investments, often in early and development stage companies. There can be no assurance the valuation of any particular company’s securities is accurate or in agreement with the market or industry comparative valuations. Investors must be able to afford market volatility and afford the loss of their investment. Companies listed on Upstream are subject to significant ongoing corporate obligations including, but not limited to disclosure, filings and notification requirements, as well compliance with applicable quantitative and qualitative listing standards.





A MERJ Exchange Market. Ethereum-powered trading app for digital securities and NFTs