Key highlights:
- IPOs and cryptocurrencies are both hot markets these days, and Coinbase is preparing to go public at the right time
- Coinbase’s move could help legizimize the cryptocurrency industry
- Coinbase was valued at $8 billion in 2018, and is likely much more valuable now
The IPO markets are red hot at the moment, and we will be seeing a contender from the cryptocurrency sector throw its hat into the ring very soon. Coinbase announced on Thursday that it submitted a confidential filing with the SEC as it prepares to go public. Coinbase was founded in 2012 as a simple way to buy BTC, but it has since expanded to a massive startup that’s active in practically all aspects of the cryptocurrency and blockchain industry.
Bitcoin‘s price is now above the previous peak of $20,000, and this is a major boost for a company like Coinbase because most of its revenue is from the commissions charged on crypto trades. And with the Bitcoin price higher than ever, Coinbase users are trading at almost unprecedented volumes.
Coinbase disclosed its filing in a blog post
Coinbase disclosed its filing with the SEC in a blog post, but didn’t provide any details on how exactly it plans to go public. Some have speculated that Coinbase wants to leverage blockchain technology or even tokens at some point in the process of its IPO. This was even hinted at in an interview by Fred Ehrsam, a co-founder of Coinbase. However, it’s unclear if the SEC would let the company go ahead with such a plan.
Reportedly, Coinbase has been profitable in the last three years. Company last raised capital in 2018, when it raised $300 million in a Series E round that valued the company at $8 billion. Thanks to the massive growth in the cryptocurrency market and the demand for IPOs, Coinbase’s valuation could be much higher now.
If Coinbase does eventually go ahead with an IPO, the cryptocurrency space could enjoy more legitimacy in the eyes of regulators. When Coinbase started in 2012, most people thought of Bitcoin as a transient trend. Some governments considered BTC as a tool for money laundering and fraud. But the situation is different right now, and Bitcoin’s mass adoption is on the horizon.
Coinbase has acquired many companies in these years to expand its operations. Custody is just one of the services offered by Coinbase, and the company stores a large amount of crypto for its clients. Coinbase does not want to rely solely on commissions, so it is expanding itself constantly.
Coinbase has recently announced some changes in its board of directors, bringing on Cisco’s CFO Kelly Kramer and prominent venture capitalist Marc Andreessen.
