IG Group to Allow Leverage Trading with Coinbase Shares

The crypto exchange will make its public debut on Wednesday.

IG Group, a financial broker listed in London, announced that it will offer leveraged trading with the shares of the crypto exchange Coinbase Global, which will make it public on April 14.

The direct listing of Coinbase on Nasdaq tomorrow is seen as a major boost for the cryptocurrency industry. Anticipated demand for the stock remains high among retail investors, and many analysts predict a massive rally of the stock upon listing.

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Valuation of $100 Billion?

Though there are many speculations on the listing valuation of the company, IG believes that it will be in the region of $75 billion. Earlier, the company was valued at roughly $90 billion in a private auction conducted by Nasdaq.

“Yes, We’ll be offering this to all leverage clients from day 1 (April 14th),” IG announced. 

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The broker is expecting Coinbase trading to begin at any point from 14:30 (UKT) onwards, but there might be a delay of a few hours for price discovery in the public market.

“Clients can only go long until there is borrow available in the market, or we have sufficient internal inventory to lend out,” IG elaborated. 

The broker will not offer any guaranteed stops for Coinbase, at least initially, and margins will be available in four tiers at 25 percent (£250,000), 40 percent (£1 million), 50 percent (£1.25 million) and 75 percent (more than £1.25 million).

Coinbase registered 114.85 million Class A common stock for the listing process. Furthermore, the company published its latest financials, showing solid performance. With a crypto trading volume of $335 billion in the first quarter of 2021, the exchange generated revenue of nearly $1.8 billion. It has more than 56 million verified users, and the number is continuously increasing with the boom in the crypto market.

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