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Coinbase, the cryptocurrency trading and exchange platform, is preparing its imminent IPO, making it the first listed start-up born exclusively in the era of digital currencies and whose value could reach $100 billion.
Coinbase will go public on the Nasdaq index next April 14 under the “COIN” label following a system known as “direct listing,” in which partners sell their shares, it said on its corporate blog following approval from the U.S. Securities and Exchange Commission (SEC).
The cryptocurrency exchange, which will be the first to be listed in the US, planned its debut in March, but postponed the date to the following month, and will offer nearly 115 million shares to the market in a departure from the traditional IPO that has been followed by firms such as Spotify or Slack.
Coinbase, which is based in San Francisco, began operating in June 2012 with the “radical idea” of democratizing the buying and selling of bitcoins in an easy and secure way, and has expanded its goal to other cryptocurrencies to become one of the main platforms in the country in less than a decade.
At the close of the 2020 financial year, it had 43 million verified users in a hundred countries and handled assets worth $90 billion, while its annual results showed net profits of more than 322 million -in the 2019 financial year it recorded losses- with a turnover of 1.3 billion.
According to documentation submitted to the SEC, Coinbase reached $68 billion in its latest private valuation round last month, already amid expectations for its IPO, a figure well above the $8 billion it reached at the end of 2018 and which could continue to rise.
The firm will offer a reference price for its securities on the eve of its new listing, but specialized media point out that, still in private hands, it ranges between $350 and $175, which would put its valuation at between $90 billion and $100 billion.
Ángel Luis Quesada, CEO of the Spanish digital asset custody company Onyze, told EFE that this high valuation is “totally feasible” since “the volumes it moves and the profits it generates at this time are much higher”, and it is “one of the reference projects in the crypto environment, which makes it have the support of the entire community.”
But a potential fall in the price of bitcoin, which today fluctuated near $58,800 after the long weekend in the United States for Easter celebrations, is a “risk factor” for its accounts, it told the regulator, so analysts are keeping an eye on its evolution.
“Bitcoin news has been relatively quiet in recent days. Some bubbly targets have been hit, anticipation is growing for Coinbase’s IPO, but ultimately it looks like this streak needs fresh billion-dollar investments from corporate America,” analyst Ed Moya of the firm Oanda opined in a note.
Above all, the U.S. stock market regulator’s green light. to the debut of Coinbase, whose turnover is led by bitcoin and ethereum, has been interpreted by its supporters as a new victory for cryptocurrencies, which enjoy increasing support among companies, financial institutions and investors.
“It is a big step for the normalization of our activity, it is essential that the regulator sees that some companies are trying to do things right and gives the green light to the next phases, this will make more companies and institutions take the step and increase their capital and operations with cryptocurrencies,” said Quesada.
Recently, Tesla announced that its electric vehicles can be purchased with bitcoin, while Visa and Mastercard credit card companies will allow cryptocurrency operations, and large banks, with firms such as Morgan Stanley at the forefront, are beginning to give the green light to cryptocurrency investments.