The bitcoin and cryptocurrency market has lost about $ 400 billion since last weekend’s peak as panic spreads among traders.
The price of bitcoin, which came within a range of $ 60,000 per bitcoin last week, is down nearly 25% – to just $ 43,000 (although bitcoin is up nearly 50% since the start of 2021).
Now, documents released by cryptocurrency exchange Coinbase ahead of its highly anticipated initial public offering (IPO) have revealed the possible events that it fears could destabilize the price of bitcoin and ethereum, potentially undermining its business.
Coinbase, a San Francisco-based bitcoin and cryptocurrency exchange, has filed to go public [+]
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Coinbase has released documents for its public debut on the Nasdaq exchange via direct listing (meaning it won’t be looking for more cash), with the fledgling bitcoin and cryotocurrency company expected to be valued at over $ 100 billion.
As part of the preparations for the IPO, Coinbase has outlined a number of factors that could affect the price of the two largest cryptocurrencies, bitcoin and ethereum, which power 56% of the total trading volume on the exchange and Coinbase most of its generate income through Transfer Fees.
These risk factors include “disruptions, hacks, splits in the underlying network, also known as“ forks ”, as well as developments in quantum computing and regulation affecting cryptocurrencies.
“The future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate,” the submission read.
Notably, the filing also cited “the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin” as a potential risk factor, as well as the transfer of Nakamoto’s bitcoins, believed to be worth approximately $ 30 billion. Some fear that if Nakamoto is identified or brought up, it could hurt bitcoin’s decentralized nature and reputation.
Nakamoto’s identity has been the subject of fierce media investigation, with multiple investigations failing to expose the mysterious bitcoin developer. In 2016, Australian entrepreneur Craig Wright claimed to be Nakamoto, but he has provided no evidence and has since waged an increasingly desperate legal war to be recognized as the creator of bitcoin, alienating much of the bitcoin and cryptocurrency community .
Bitcoin price has fallen sharply over the past week, from nearly $ 60,000 per bitcoin to [+]
Coinbase
Bitcoin is known for its extreme volatility. In late 2017, bitcoin price climbed to around $ 20,000, before crashing to $ 3,000 in 2018. Last year, bitcoin price fell below $ 4,000 in March before recovering through the summer. It started its last bull run in October and passed its 2017 peak in December, when institutional investors showed renewed interest in digital assets.
Last week, the combined value of the 18.6 million bitcoin tokens in circulation reached $ 1 trillion for the first time – double the $ 500 billion it started in 2021 when the cryptocurrency mania returned.
“You can expect volatility in our financial data given the price cycles of the cryptocurrency industry,” Brian Armstrong, CEO of Coinbase, wrote in a letter this week alongside the company’s filing documents. “This does not worry us, as we have always had a long-term perspective on cryptocurrency adoption.”