Coinbase IPO: What to Know

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Coinmonks

4 min readApr 12, 2021

On April 14th, 2021, Coinbase will be the first major Cryptocurrency Company to go public. But what does that mean and why is it important for investors?

Coinbase: ‘A secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more’. (https://www.coinbase.com/).

Photo by André François McKenzie on Unsplash

What is the Coinbase IPO?

Coinbase is the largest cryptocurrency exchange platform in the US, and unlike other similar companies, Coinbase is going to be available on the Nasdaq stock exchange on April 14 2021, after going through with their initial public offering (IPO).

Notably, while other (traditional) IPOs make use of investment banks to help sell their shares, Coinbase will be skipping this and opting for a direct public offering (DPO) instead. Put simply, the current owners of the company will convert their shares to stock, and these will be listed on Nasdaq for investors to then buy; removing the expensive step of involving investment bankers and their fees. Typically a company will do this when they are not looking to raise additional capital, but instead are selling their shares of stock to the public.

Should I Invest?

As with any company investment, it is best to research the company, what their plans for the future are, and in this case, to also understand the cryptocurrency market.

Coinbase Usage

The company started in 2012, with the mission of “…building the cryptoeconomy — a more fair, efficient and transparent financial system enabled by crypto.” (https://investor.coinbase.com/overview/default.aspx).

In recent years the platform has grown in popularity, with 43 million verified users by the end of December 2020, and more than 56 million as of the end of March 2021.

Revenue + Profit

Noteworthy is that in the first quarter of 2021, it has surpassed its revenue for the whole of 2020. In 2020, Coinbase reported a revenue $1.3 billion and a profit of $322 million, while in the first quarter of 2021, they have reported a $1.8 billion revenue and $730 — $800 million in profit.

Around 96% of Coinbase revenue comes from transaction fees on the platform, and with the trading volume of 2021’s first quarter being $335 billion, compared to 2020’s total of $193 billion, it is clear how their revenue has increased drastically.

Investing in Coinbase on Nasdaq

The Coinbase IPO will be trading on Nasdaq under the ticker COIN. As stated in the Coinbase IPO filing, the company will be selling 114.9 million shares to the public. A reference price for the shares is set to be revealed on April 13th 2021 (the day before trading commences).

According to investors.com, analysts are estimating the value of Coinbase to be between $70-$90 billion. However, some are predicting it to be as high as $100 billion.

However, the company has outlined the many risks that are also attached to investing in a company that relies so heavily on a highly fluctuating market. Some of the many factors that the company’s revenue depends on, according to the Coinbase IPO filing, include:

market conditions across the cryptoeconomy;
investment trading activities of highly active users, speculators, miners and investors;
decreased user and investor confidence in cryto assets and crypto platforms;
monetary policies of governments, trade restrictions, and fiat currency devaluations and;
the liquidity of crypto platforms.

Coinbase states that they cannot assure any crypto assets that their platform supports will maintain value, or that there will be significant levels of trading activity. If the demand for trading crypto assets, or the price of crypto assets decline, their business and platform would be adversely affected.

Overall, the news that this is the first major cryptocurrency platform to go public is exciting at the least. There is speculation that the Coinbase IPO will also provide the cryptoeconomy with more validation.

If you are interested in finding out more about Coinbase, and/or about their IPO, take a look at the following links:

Coinbase:

https://help.coinbase.com/en/coinbase/getting-started/crypto-education/what-is-coinbase

Coinbase IPO:

Coinbase IPO: Here's What You Need To Know

Soon you'll be able to buy the company that helps you buy Bitcoin. Coinbase, the largest cryptocurrency exchange in the…

www.forbes.com

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Coinbase IPO: What to Know

What is the Coinbase IPO?

Should I Invest?

Coinbase IPO: Here's What You Need To Know

Soon you'll be able to buy the company that helps you buy Bitcoin. Coinbase, the largest cryptocurrency exchange in the…

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Written by Jasmine Taylor