Coinbase has announced that it expects to go public next week on Wednesday, April 14.
Coinbase Global Inc. is the largest U.S. cryptocurrency exchange. The company reports it has 2.8 million users who are making monthly transactions as well as 43 million verified users. The company’s prospectus says its mission is to “create an open financial system for the world.” Coinbase started in 2012 when its creators had the idea that “anyone, anywhere, should be able to easily and securely send and receive bitcoin, the first crypto asset.”
When Coinbase emerged on the cryptocurrency scene, the crypto world didn’t look anything like it does now. In the summer of 2012, Bitcoin saw highs slightly above $15; it didn’t rise above $15 again until the new year. Then, in 2017, it had a bit of a resurgence and reached a record high of $20,089 on December 17, 2017, according to Investopedia.com. As of April 5, 2021, the price of Bitcoin was around $58,600.
It’s been quite the ride for Bitcoin and the cryptocurrency market over the past decade. And it appears that the ride will continue. Analysts from JPMorgan — a former Bitcoin critic and skeptic — have said that the cryptocurrency could climb as high as $130,000 over the long term if it continues to see its volatility converge with that of gold. In a note to clients, JPMorgan analysts, led by Nikolaos Panigirtzoglou, wrote:
Considering how big the financial investment into gold is, any such crowding out of gold as an alternative currency implies a big upside for bitcoin over the long term… Mechanically, the bitcoin price would have to rise $130,000, to match the total private sector investment in gold.
There have always been critics of bitcoin and the cryptocurrency market, like Warren Buffett and Treasury Secretary Janet Yellen. Buffett has criticized cryptocurrencies as being “risky” and “worthless.” Yellen has also been outspoken in her criticism of Bitcoin, warning it’s “extremely inefficient.” While some people may take these critiques seriously, it hasn’t prevented more and more companies from accepting cryptocurrency as an official payment option.
Yum Brands (NYSE: YUM) (which operates KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill) accepts cryptocurrencies as a valid payment method. Home Depot (NYSE: HD) accepts Bitcoin payments through Flexa’s checkout systems. Travel giant Expedia (NASDAQ: EXPE) has made it easy for consumers to purchase flights and travel with Bitcoin. Even online payments company PayPal (NASDAQ: PYPL) announced that it will allow users to pay in Bitcoin and other leading assets upon checkout with certain vendors.
With analysts’ growing acceptance of cryptocurrencies, momentum has returned to the cryptocurrency market (as evidenced by the price of Bitcoin), which could explain why Coinbase has decided to go public in April.
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The company set its direct listing for Wednesday, April 14 after it received approval from the Securities and Exchange Commission (SEC). It will trade on the Nasdaq under the ticker symbol “COIN.” In the past few years, going forward with a direct listing instead of a traditional initial public offering (IPO) has become a more common way to go public. This year’s market debut by Roblox (NYSE: RBLX) was a direct listing, and Spotify (NYSE: Spot), Slack (NYSE: WORK), and Palantir (NYSE: PLTR) have all gone public through direct listings.
Coinbase’s direct listing will be Nasdaq’s first major direct listing. It plans to register about 115 million shares of Class A common stock. A direct listing means that a company won’t be putting up any new stock. Instead, it’s allowing existing shareholders to sell their shares to new investors. Bloomberg News reports that Coinbase was valued at about $90 billion in its final week of trading on Nasdaq’s private market.
In its S-1, Coinbase says of its mission:
We are building the cryptoeconomy — a more fair, accessible, efficient, and transparent financial system for the internet age that leverages crypto assets: digital assets built using blockchain technology.
We started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin, the first crypto asset. We built a trusted platform for accessing Bitcoin and the broader cryptoeconomy by reducing the complexity of the industry through a simple and intuitive user experience.
Coinbase has come a long way since 2012. It has continued to grow, and the cryptocurrency market has evolved, with major companies and their e-commerce platforms accepting cryptocurrencies as valid payment methods. Coinbase and its potential market debut have gained a lot of attention over the past few months, and on April 14, we’ll get to see if it lives up to all that hype.
For more information on Coinbase’s direct listing, other upcoming IPOs, and news on the IPO market, click here.
Until next time,
Monica Savaglia
Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.
