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Coinbase Plans To Go Public Evading the Traditional IPO Process

In January 2021, the US-based cryptocurrency exchange, Coinbase, announced going public through a direct listing. According to the reports, the company could earn about $50 million to $70 million as a public corporation.

On December 17, 2020, Coinbase Global, Inc. had previously reported that it had privately circulated a draft registration statement Form S-1 with the Securities and Exchange Commission (SEC). The Form S-1 is anticipated to become valid after the SEC concludes its verification process related to market and other factors.

Headquartered in San Francisco, California, Coinbase has served above 100 countries worldwide with more than 43 million verified users. The company was founded in 2012, and at present, it has become the largest digital currency exchange in the U.S. by trade volumes.

As a private corporation, the firm has generated over $540 million in funding. It enables users to purchase and exchange decentralized tokens such as Tezos, Litecoin, Ethereum Classic, Ethereum, Bitcoin Cash, Bitcoin, and many other cryptocurrencies.

Coinbase offers two main products:

  1. GDAX (Global Digital Asset Exchange) to trade several digital assets on its professional asset trading portal, and
  2. Fiat currency to a customer-facing broker exchanges for Litecoin, Ethereum Classic, Ethereum, Bitcoin and Bitcoin Cash.

A direct listing implies that a firm abandons the conventional method of depending on investment banks to set rates and line up shares for investors. Direct listings have been making a resurgence steadily. This process has given some enormous first-day boom to many firms like Spotify and Slack.

The forthcoming Coinbase IPO is considered an outstanding achievement by many firms in the crypto world, claiming it will help offer credibility to an industry, long viewed with suspicion by authorities and many traditional investors. Instead of raising new money, its following businesses such as Slack, Spotify, and Palantir, opting to encourage current investors to sell on the open market.

There is a broad connection between customers' interest in bitcoin price, trading and cryptocurrencies. It can be presumed that through this action, Coinbase, who is making revenue from users trading, can improve its financial results through an increase in bitcoin prices. On the day of the announcement, Coinbase’s shares have recovered nearly 50%.

It is estimated that Coinbase's IPO date will occur in late February or early March. This event is going to be very important for the other cryptocurrency firms too. In 2018, Coinbase publicly announced its valuation worth $8 billion in its Series E funding round.

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