What to Expect From Coinbase
Coinbase will initially sell shares via a direct listing on Nasdaq. Later, the investment will likely be available on retail apps like Robinhood and eToro.
Coinbase has been active since 2012. It has previously attracted $800 million in VC investments, and it generates yearly revenue of $1.14 billion.
Like most crypto exchanges, Coinbase generates revenue from trading fees. This means that the performance of Coinbase’s stock will be affected by the performance of the crypto market, albeit in an indirect manner. A more active crypto market means that the firm will generate more revenue.
Some estimates have put Coinbase’s expected valuation at $100 billion. However, more conservative estimates from the analytics firm Messari have suggested that it could be valued between $28 billion and $32 billion. That would place Coinbase among the top 400 publicly traded companies.
Even with a low-end valuation, Coinbase’s shares will likely become the most notable crypto-related investment on the stock market.
Will Crypto IPOs Become a Trend?
Coinbase’s IPO is notable because the company is one of the first cryptocurrency exchanges to seek an IPO on the stock exchange.
As such, the firm’s decision to go public could influence other leading exchanges. Kraken is reportedly planning a similar IPO for 2022. Meanwhile, Gemini co-founders Tyler and Cameron Winklevoss stated that the company is carrying out “internal discussions” about an IPO in January.
These IPOs could be attractive to traditional and institutional investors, as they provide a way to invest in the crypto industry without the technical hurdles that come with direct Bitcoin investments.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.