On 14th April 2021, Coinbase, the largest crypto exchange platform in the USA, went public. It is the biggest step towards wider acceptance of digital or cryptocurrencies into the mainstream.
Coinbase became a public company with the ticker COIN on the National Association of Securities Dealers Automated Quotations (NASDAQ) with the direct listing of shares instead of a traditional initial public offering of shares. This technique is spearheaded by the big companies in the financial market like Palantir, Slack, Asana, and Spotify in recent times. Coinbase has allowed the investors to buy the company that helps them buy cryptocurrency with the direct listing. This is different from the traditional banks helping the investors put their money into cryptocurrency funds of any kind.
Coinbase Global, Inc. is a company based in San Francisco, the USA, that operates as a straightforward cryptocurrency exchange platform that allows retail buyers and sellers to deal in the crypto market.
It was founded in 2012 by Fred Ehrsam and Brian Armstrong. The company provides Coinbase Pro, a standard trading platform for experienced users. It includes charts and features to understand the crypto market for making transactions efficiently. Coinbase has 1,700 employees and 56 million registered users currently.
Also, the company has its cryptocurrency called USD Coin (USDC) built on the Ethereum platform. Coinbase is in the early stages of giving an app and a physical VISA debit card to its users for spending cryptocurrencies. There is a free wallet service for the users on Coinbase to store their cryptocurrencies safely. The company ensures that its users get complete privacy by securing their data and digital accounts. Coinbase earns fees and commission when the users buy and sell cryptocurrencies like Bitcoin and Ethereum on its platform.
Direct listing on NASDAQ for Coinbase happened at a valuation quite similar to Airbnb and Facebook when they went public with their IPO. The shares of Coinbase began trading at $381 each, which is up by 52% from a reference price of $250 with eventual closing at $328.28 on the day of this announcement. With that, the valuation of the company reached $85.7 billion based on outstanding shares, which are ten times greater than the last valuation.
According to the US Security and Exchanges Commission (SEC) filings, Coinbase achieved about $1.3 billion in revenue in 2020, which is double from last year. Recently, the company has reported that their first-quarter revenue increased by 847% from last year to $1.8 billion and the estimated net profit of $730 million to $800 million for the same period.
Many cryptocurrency experts who think that the technology will upend the global financial system are talking about this Coinbase news as a watershed moment and a vindication of their belief in terms of the potential of their cause. They are thinking on the lines of a revolution that could bring about a decentralized financial system without the involvement of governments or banks. It’s very much reflected in the plan of Coinbase to create an open financial system for the world and increase economic freedom.
Coinbase has gone public at a time when companies like Tesla and Square are stockpiling on Bitcoin, and the celebrities are doing a spending spree on digital art using the NFT technology. This trendy choice from the company was a next step from the past when they used to aid and abet the similar non-establishment craze for cryptocurrencies since its very inception. At that point, digital or cryptocurrencies were mocked for being a tool to the offenders or criminals. Now the time has changed completely, with cryptocurrencies becoming an alternative for money. It remains to be seen if Bitcoin develops more as a speculative asset or actually replaces the dollar.