Coinbase announces its direct listing date. Hype starts to build. Crypto advocates and speculators alike start buying ahead of COIN’s big debut. Many people lever up to get even more exposure. Open interest for BTC futures reaches new heights as the king of crypto breaks to a fresh all-time high. Coinbase goes public, its stock price spikes at the open, then proceeds to fall back down to earth in a similar fashion to past direct listings that came before it. Price weakness translates to skepticism as the euphoria around crypto’s “watershed moment” slowly dies down; safe to say it’s been quite a week since Coinbase went public.

To quickly recap, COIN’s reference price pre-trading on the Nasdaq was set at $250 but the stock wound up opening at $381, marking a 52% jump at the open; this initial price pop was larger than average compared to other prominent direct listings in recent years.

COIN ended up peaking intraday just under $430 a share before sliding to its closing price of $328, ending its first day of trading at a ~$65B valuation (using current shares out, not fully diluted); as of this writing, COIN is trading at ~$315.

The Volatility of Direct Listings

Direct listings offer several benefits for companies looking to go public, but early buyers are almost certainly going to face major bouts of volatility, as we noted in our Daily last week. Stocks in prior direct listings also showed a tendency to surge on opening day, but their average performance in the following weeks and months was a bit more mixed.

For example, Slack (WORK) closed 48% higher than its reference price on its opening day of trading, but struggled in the months following; WORK declined 34% and 44% in the three and six months, respectively, following its first day of trading. On the o