Here’s Why Coinbase Exchange IPO is ‘Huge’ News for the Crypto Market

The largest cryptocurrency exchange in the US, Coinbase, announced Thursday that it had filed confidentially with regulators to go public. It did not specify whether the exchange plans to go with an initial public offering (IPO) or other listing routes.

The day Coinbase divulged the information, the Bitcoin price also hit a new record of $23,800.

As per the official announcement, Coinbase Global, Inc. has confidentially submitted a draft regeneration statement on Form S-1 with the Securities and Exchange Commission (SEC), which is currently under the process of review.

The news of the San Francisco-based exchange going public is significant for the cryptocurrency market. Coinbase has long been rumored for a public listing for one of the best-known companies in the industry. Jake Chervinsky, the General Counsel at Compound Finance, said,

“If it wasn’t obvious, this is huge news.”

“Sure, there are other publicly-traded companies in the USA with a stake in crypto, but none remotely like Coinbase. The fact that a crypto exchange is suitable for public listing sends a massive signal of legitimacy to the finance world.”

Founded in 2012, Coinbase has been slowly growing its suite of tools, catering to both the retail and institutional investors.

The company is “spiritually” built to go public via an offering that involves digital tokens on a blockchain, said Coinbase co-founder Fred Ehsram in a recent interview with Fortune.

During the company’s last fundraising round for $300 million in 2018, Coinbase was valued at nearly $8 billion, which in the current hot crypto market, has now swelled to $28 billion on the back of an estimated 13,000 retail customers a day and custodying $25 billion of customer funds across 35 million customers. Mira Christanto of crypto data provider Messari noted,

“Following Coinbase’s IPO announcement, we value the company at $28 billion. Coinbase is one of the most prominent exchanges with $1 billion daily volume in Dec-20.”

This IPO will be an opportunity to cash out not only for the early shareholders, including CEO Brian Armstrong and the backers, venture firm Andreessen Horowitz, Y Combinator, and Greylock Partners but also for the employees the means to start their startups. MacroScope, involved in institutional trading and asset management, said,

“Getting major flashbacks right now to Amazon’s IPO in the 1990s, when I was a trader on a big sell-side desk. Feels very similar in several ways including industry backdrop and public sentiment, the latter of which included a huge amount of skepticism and scorn.”

Besides legitimizing the crypto industry, the Coinbase IPO is expected to present another opportunity to jump on the cryptocurrency bandwagon. Some feel this “watershed moment” may even clear how the SEC can approve a Bitcoin ETF.

However, the crypto market wants Coinbase to go public early in the bull run and not run the risk of the top the market.

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Author: AnTy

Cryptocurrency Exchange Coinbase Files S-1 Form With SEC for Potential IPO

After months of speculation, Coinbase, the largest cryptocurrency exchange in North America, has confidentially filed for a public listing. Per an official blog post from the exchange, Coinbase revealed that it had completed its S-1 Filing and shipped it off to the Securities and Exchange Commission (SEC).

Not There Yet

The company pointed out that the filing will be effective following a review from the regulator.

The SEC Form S-1 is the initial registration form for companies planning on floating their IPOs to register their securities with the SEC.

It’s a prerequisite for companies before they list on any of the country’s stock exchange platforms. It contains details such as planned use of capital proceeds, company business model, and competitors. The form also features details like the methodology for arriving at the offering price and possible dilutions to other listed securities.

The Crypto Space is Ripe for IPOs

This isn’t the first time that Coinbase will be linked to an imminent IPO. In July, Reuters reported that the company was working towards a public listing, which would occur either later this year or in the first half of 2021.

At the time, Coinbase was looking to hire investment banks and law firms to guide the exchange in the process. It was also reported then that the company was considering a direct listing, which offers the opportunity of selling existing shares without offering new ones. Direct listings have become popular recently as an alternative to the traditional IPO.

Coinbase’s filing couldn’t have come at a better time considering Bitcoin’s recent rally. BTC broke its all-time high yesterday and has sat pretty above the $20,000 mark since then. With the leading cryptocurrency – as well as several other large-cap assets – expected to maintain their hot streak for the next few weeks, the crypto market is as vibrant as it has ever been.

Coinbase isn’t the only crypto-facing company that is working towards a possible listing. As Bitcoin Exchange Guide reported this week, Robinhood, the renowned crypto-friendly trading platform, had also made significant progress in pushing for a public listing. Robinhood had tapped Wall Street investment bank Goldman Sachs to lead the public offering, with the firm hoping to list in the coming months.

Robinhood plans to raise about $20 billion in its IPO valuation. Subject to market conditions, the Menlo Park-based company hopes to get on with the listing as soon as possible in 2021.

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Author: Jimmy Aki