Coinbase IPO announced! A Coinbase IPO has been announced by the cryptocurrency giant via an announcement – this is just the latest in a parade of high-profile startups to pursue an IPO in 2020.
Coinbase was founded in 2020 as a simple way for consumers to purchase Bitcoin and other cryptocurrencies. Coinbase has since become one of the biggest conglomerates in cryptocurrency.
Coinbase’s announcement comes at a time when both the IPO market and cryptocurrency prices are red-hot. Trading volume is surging as well as the price of Bitcoin, smashing through its previous highs and nearing $23,500.00. This bodes well for a trading platform like Coinbase since it makes the bulk of its revenue from trading commissions.
In its IPO announcement via its company blog post, Coinbase did not provide details about how it would structure its offering. A traditional IPO utilizes banks to arrange for institutions to get first dibs on the stock for a fixed price – this would likely be an anathema for many crypto enthusiasts and Coinbase employees given cryptocurrency’s anarchist roots.
It is not clear as to whether or not the Securities and Exchange Commission (SEC) would sign off on such an arrangement. If the agency refuses to grant an IPO, Coinbase could pursue a direct listing via selling shares directly to the public. This was recently done by Spotify and Slack.
It is not clear as to how much Coinbase is making, although it has been valued, as a company, at $8 billion. This figure is not recent, however, and dates back to 2018. Coinbase is likely to seek a much higher valuation owing to the boom in the crypto market and the surge in demand for IPOs.
Early shareholders, including Brian Armstrong and Andreessen Horowitz, will have an opportunity to cash out. This will undoubtedly mark an achievement and milestone in the crypto-industry’s long-running quest for legitimacy. Many, in the beginning and still today, derided and dismissed Bitcoin as a fad – or worse, a vehicle for crime and money laundering. Many, including President Trump, treat digital currency with hostility.
Despite the hostility, the last two years have seen a surge of acceptance by mainstream institutions such as PayPal, Fidelity, Square, and others.
Bolstered by this activity, Coinbase has made dozens of acquisitions in recent years to help diversify its revenue model beyond trading fees. This includes custodial services.
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