After a year of tremendous growth in Bitcoin’s value, Coinbase Global is set to launch its highly anticipated IPO. Coinbase’s IPO is scheduled for April 14.
Coinbase is the largest US cryptocurrency exchange, with approximately 50 cryptocurrencies to trade. The company will be the first major crypto company to go public.
Bitcoin is the largest digital currency in terms of market value and has more than doubled in value so far this year. As a result, this has helped the total value of the cryptocurrency market soar more than $ 2 trillion, doubling in about two months amid rising institutional demand. Bitcoin accounts for about half of that $ 2 trillion.
Coinbase’s IPO is expected to give the cryptocurrency market more validation.
Morgan Stanley now allows some of its wealthiest clients to add Bitcoin to their wallets. In addition, Tesla now accepts Bitcoin as payment for cars. MasterCard (MA) and PayPal (PYPL) are also embracing Bitcoin.
Coinbase IPO is a direct offer
The company is not doing a traditional IPO. Instead, it is made public through a direct listing. Current Coinbase stock owners will convert their shares to make them available for trading. This allows them to avoid high costs from investment bankers.
Direct listings are rare, but are used by large companies such as Spotify technology (SPOT) and Palantir Technologies (PLTR).
The Coinbase IPO will be traded on the Nasdaq under the ticker COIN.
According to Coinbase’s IPO filing, the company is selling 114.9 million shares directly to the public. It plans to publish a reference price for shares one day before trading begins.
Coinbase is valued anywhere from $ 70 billion to $ 90 billion.
In a voluntary and preliminary first-quarter earnings report released after the market closed on Tuesday, Coinbase said it has 56 million users on its platform, up from 6 million users in the same period a year ago.
First quarter exceeds all of 2020
The first quarter results passed all of 2020. Coinbase reported revenue of $ 1.8 billion in the quarter, with net income of approximately $ 730 million to $ 800 million, according to the filing. Last year, it brought in $ 1.3 billion in revenue with a profit of $ 322 million.
Trading volume reached more than $ 335 billion in the quarter. For all of 2020, the trade volume was $ 193 billion.
Total assets on Coinbase’s platform have increased from $ 90 billion to $ 223 billion, an increase of nearly 150%.
The full year outlook presented a range of opportunities, “given the inherent unpredictability of our business,” the company said in its report.
“To say the obvious, our business is difficult to predict,” Alesia Haas, Coinbase’s Chief Financial Officer, said after the earnings report. That’s because it cannot predict the prices of Bitcoin and other cryptocurrencies.
About 96% of Coinbase’s revenue comes from transaction fees. In addition to its exchange services, it has several industries. One of these is Coinbase Commerce, which provides online retailers with software that allows them to accept cryptocurrency payments.
Follow Brian Deagon on Twitter at @BuienRadarNL for more information on technical stocks, analysis and financial markets.
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