caroline: from bloomberg's world headquarters in new york and here in london, i am caroline hyde. romaine: let's take a look at where we stand in financial markets. the s&p 500 and nasdaq 100 closed at a record high. joe: the question is, "what'd you miss?" caroline: we are on an eve of a milestone for the markets. more mainstream acceptance and

access to cryptocurrencies. coinbase ready to go public tomorrow. the future is different when it comes to spac's. now facing a bit of a roadblock as u.s. regulators look to crack down on accounting rules. let's start with spac's. joe: so many companies went to the spac round. it is easier, faster, may be a little less scrutiny. but they have not been doing so well. if we look at the greenhorn line, after crushing debt, it has faded lately, looking pretty weak. there are some regulatory issues but also just markets. romaine: also some concerns i guess about the ownership structure.

joe: joining us with more, bloomberg deals reporter. there are a lot of moving parts to this story. there is the market performance of companies that have gone public. there is also the slowdown. we know that anchors are tired from all the paperwork. now there are some accounting questions. romain is laughing but it is true, there is a lot of paperwork involved. now there are some accounting issues. how does this add to the headache? >> the short answer, this s.e.c. statement will create even more paperwork. they are basically saying that it should be treated as liability rather than equity. everybody, in whatever stage there spac is in, pending or a spac that has announced a deal and is waiting for closing, they will all have to go back and look at the accounting and correct them if they made an

error. this has always been the case. that would mean that all the auditors and lawyers have to put their head together and make sure the next is going to be right. caroline: the sec singing this has always been the case. is this demonstrative of the sec getting more more worried? crystal: in the past few weeks, we have seen more communications from the sec about the spac market. the spac market had a very good run for perhaps 16, 18 months. it has been the past month or two with regulator direction or guidance on deals. as a result, things have really calmed down. these spac's that have gone public have traded below $10.

newly public companies are not trading as well as they used to. not getting as big of a jump in share prices as they used to. the signal from the sec seems to be that this is going a little too hot. and maybe this is at least what the market is revealing. romaine: what happens with all those folks who maybe bought into all of the spac's that are already out here? is this a losing proposition or is there still good value that a lot of these people are looking for? crystal: the good thing is, if you are an investor who bought in at the beginning of the deal, you can redeem. do not need to participate in the eventual merger if the spac is trading at a loss. so we could see potentially more deals getting a bigger redemption. as a result, they would either need institutional investors.

we have not seen any of that yet. but, if the market continues to perceive that the sec is cracking down, that could happen. romaine: the deal earlier on that spac, that did well. still a little bit of an appetite for that out there. crystal tse, we will catch up with you soon. we are going to go from spac's to direct listings. coinbase set to go public tomorrow in a direct listing. our next guest, the upcoming listing, the amazon moment for crypto. this is bloomberg. ♪

joe: coinbase making its public debut during the likeness -- through a direct listing with the nasdaq. we take a look at how far crypto has come. coinbase is going public. but it is not just another direct listing. it is a symbol of how far crypto has come in its increasing institutional and septic spirit. bitcoin -- institutional acceptance. the mainstream basically always viewed it extremely skeptically. >> the greatest positive -- the greatest ponzi scheme in human history. >> i could care less what bitcoin trades for, how, why it trades, who trades it. if you are stupid enough to buy it, you will pay the price one day. >> i think it is a scam for criminals. joe: fast forward to now, bitcoin has more than doubled this year and it is a more than

tenfold since his lows last march. now with the total cryptocurrency market worth trillions of dollars, large institutions are willing to play a role. >> bitcoin should be worth about $400,000. joe: coinbase is so big that despite being less than a decade old, the company is by some measures larger than established exchanges like ice. >> i think there are many who are standing outside the gates waiting for that moment when they can have exposure. joe: coinbase at 56 million verified users in the quarter. crypto seems here to stay. for more on this moment, let's bring in gil luria, da davidson head of institutional research. a buy rating already. a price target of $440 on

coinbase. what does that mean? what kind of market cap are we looking at? how big of a company can coinbase be. gil: that can lead them to over $100 billion of market cap tomorrow. that is how excited people are for this direct listing. it would give people an opportunity to invest in the crypto asset space without having to figure out which specific crypto asset to invest in. caroline: trading volumes have been going through the roof. 14 billion in the fourth quarter of 2020. clearly this is a business that continues to scale. what is so important for coinbase? full disclosure, my husband does work for coinbase as a senior manager. talk about whether it is the institutional investor that is so important or the retail investor? gil: right now, most of the

revenue and profit is coming from that retail investor where coinbase had a really good early start and continues to have the broadest clientele. increasingly, it is the institutional investor that is driving the asset and trading volume and even the subscription revenues for coinbase. that is where coinbase is particularly well positioned because they are established, because they are very compliance oriented, have been very secure and have a nice brand, they have been a good fit for institutions. when we say institutions, we meet institutional investors and also enterprise customers. coinbase has positioned themselves well to capture that increasingly important client base. romaine: let's talk about coinbase as a public company and whether it becomes the proxy for bitcoin itself and the feedback

loop that could potentially create. is that good or bad for coinbase? gil: coinbase will not be able to escape crypto winters. we have seen cycles where adoption accelerates and asset cycles go up exponentially. after that, a cycle where prices go down and stay at lower levels for a period of time. over time, the growth is been exponential. there is crypto summer and crypto winter. coinbase will not be able to escape crypto winter. when there is less volatility, asset prices are lower, coinbase as a result will be lower. over time, they will benefit from that long-term growth and they should have the same level of growth as crypto assets overall. it will be more of an up-and-down situation then comparable high-growth stocks. joe: let's talk about the

competitive risks. coinbase has been very early in this space. it built a platform that was very regulatory friendly, very safe. so far, we have not really seen in a meaningful way the established brokerages get into it. we have not seen the adoption of an etf that would allow people to have access to bitcoin via a traditional brokerage. is there a risk for either new entrants or incumbent financial players to take share away? gil: on the consumer side, i would say the risk is from square, paypal, and robinhood. they are already digital wallets and they have done a good job of incorporating crypto. as an asset side-by-side with cash or stocks. on an institutional side, i would point to grayscale, a business which a crypto holding company started a while ago. very focused on institutional

investors. they are also growing very quickly. on the consumer side, i would focus on those digital wallet providers. they get it and they have the right customer base. caroline: when you just went about analyzing this business, you say you have it in your notes, march 2, coinbase introducing crypto's amazon moment. what part of the business do you see as coinbase really getting bigger and eager? the moment, they are in exchange but they have been doing stuff in terms of custody, looking at basically becoming an all things all crypto business. what do you compare it? gil: the parallel to amazon is to say that up until amazon's ipo, the internet was really a thing on the side that did not impact a lot of other businesses , was not really in the

consciousness of big business. amazon's ipo change that in 1997. since then, every business has been transformed by the internet. crypto has been on the side a little bit. it has been an interesting curiosity. when you have a $100 billion market cap company tomorrow when all they do is crypto, it will be part of the financial system. a lot of companies will realize they have to adjust and adapt to how crypto technology will impact their businesses. for coinbase to continue to be successful, they have to make that transition from consumer to institutional investors, at some point sovereign investors, and they have to continue to invest in the products that are more subscription-revenue oriented. those are the types of business that will stabilize the revenue.

romaine: basically, we are talking about -- i believe we are getting a reference price right now here. when we talk about this, i also hear a lot, additional costs, and what about pricing power? how do they deal with that? gil: additional costs, they said -- armstrong said that he intends to break even in the foreseeable future. he said that as he made $1.1 million -- 1.1 looking dollars of ebitda last quarter. he intends to invest in product services, new product development. in terms of the pricing power, i would say on the consumer side, it has held up fairly well. on the institutional side, what works in their favor, this sense of security. if you are a corporate treasurer who has to pick where to put their bitcoin, you will probably put it in a place that is the best known, the most secure.

that will help their pricing power with institutional customers. caroline: reference price, $250 at the moment by nasdaq. of course, that is the starting number. quite a way off your $440 price target. how do you think tomorrow's auction plays out? who do you think will be the big buyers? much volatility are you expecting on the day? gil: a lot. i expect a lot of activity. a lot of excitement, a lot of volatility. it is a direct listing. it is not managed. the stock will be out there and it will trade the way the supply and demand move it. i expect the outcome to be a favorable one. there is a lot of excitement, he a lot of pent-up demand to own coinbase. i reminisced to another important ipo, which happened in 2012. another market leader in an

open-ended category went public. facebook, $40, everyone was so excited when the stock opened at 20, than $15 a couple of days later. so that is a possible outcome. but expected tomorrow to be good for it. romaine: we expect to catch up you with you soon to get your reaction. based on the luminary information we are getting, $250 will be the reference price. from new york, this is bloomberg. ♪

joe: fed chair jay powell has made it clear that a priority of his is reaching maximum employment that is broad-based. a way to get there, increasing the hiring of tens of millions of people with u.s. criminal records. the author of a new book out

today, untapped talent, how second chance hiring works for your business and the community. this has been a long time passion and mission of yours. this is a great opportunity to hire people with criminal records. what is the number one thing in your view that any company should know about this opportunity for finding, as the title of your book puts it, untapped talent. >> one thing to recognize is that people with criminal records should not be the employees of last resort. when sourced right and supported appropriately, they can actually be superior employees. romaine: how do that message through to employees specifically -- employers, i should say. and more importantly, i guess, a general public that still seems to be skeptical of anyone who has spent time in prison. >> is going to be a long haul.

one of the reasons i wrote the book, to guide people, employers, so they did not have to make the mistakes of others. there is a right way and wrong way to do this. the truth of the matter is you can't sugarcoat this. the majority of the people who served a prison term where there for serious crimes. usually crimes of violence come often crimes of property. yes, drugs as well. that does not mean that they are irredeemably bad people or cannot be great employees. so there is this uphill battle. one of the things that i focused on in showing the example of other employers, because i think there is nothing like one employer seeing a positive experience with another employer. i think that helps quite a bit. caroline: you said this has to be business not charity to be scalable. who is doing this right? >> it is often little market

companies. they do not have all the resources. they may not be the employer's first choice in a marketplace. you find some really great companies. for instance, in philadelphia, brown superstores. jeff brown runs a chain of grocery stores. 600 of his 2500 employees are second chance hires. we have seen similar successes in michigan. 1200 employees. hundreds have been through their welfare career program. a company in cincinnati, they were the subject of harvard business school's first and only case study, 130 of their 180 employees are second chance. all of these are for-profit companies. joe: i started this segment by pointing out that this dovetails

to the fed. what do you think needs to happen on the sort of national policy front, when your book is targeted toward businesses, but from a national policy perspective? >> it is difficult to do this nationally because most of the criminal justice laws that are actively interfering with employment our state legislation. on -- fortunately, there are some great nonprofits and think tanks taking up this charge. the old paradigm that you are either soft on crime or tough on crime is wrong. what you should be is strong on public safety, strong on giving people opportunities, and those of hand. very often, our tough on crime

laws actually interfere with the ability of people to get employed or stay employed. caroline: such important writing. we thank you for taking us through it. the author of "untapped talent." it is out today. meanwhile, the breaking news. romaine:, the coinbase listing tomorrow. the reference price from the nasdaq. 250 dollars. that gives it evaluation well below the two -- well below the 100 -- well below the $400 billion people are looking for. joe: ftx, a crypto exchange, already trading notional. already at 6.8 right now. we will see. it is going to be a fun one. caroline: it is going to be wild.

romaine: that is all we are doing tomorrow, right? joe: only crypto after tomorrow. "bloomberg technology" is next. romaine: have a great evening. this is bloomberg. ♪ [ sigh ] not gonna happen.

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caroline: i am caroline hyde in for emily chang and this is "bloomberg technology." u.s. officials pause the j&j vaccine after six women develop rare blood clotting. plus, we are getting a coinbase direct listing reference