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Coinbase files for IPO

Photo of: Joseph Stone
by Joseph Stone

The world’s leading crypto exchange, Coinbase wants to go public. The company has applied to the US Securities and Exchange Commission (SEC). The value of the exchange reached 8 billion dollars in 2018.

The growing adoption of cryptocurrencies is boosting the image of the major exchanges. And Coinbase is undoubtedly, like Binance, a reference company in the crypto industry. According to the SEC, the exchange wants to go public.

Coinbase is in fact taking the first step in this process with the American stock market regulator. The firm confirms that it has “confidentially submitted” this project to the Securities and Exchange Commission.

This IPO will be an opportunity for Coinbase to raise several billion dollars. How much exactly? Details are still confidential at this stage. But in 2018, its value will reach $8 billion.

According to Hurun’s ranking of the world’s most highly valued startups, unicorns, 2% of them operate in the blockchain and crypto sector. This is particularly the case for Coinbase, which is ranked 31st in the Global Unicorn Index 2020.

This announcement comes at a time when Bitcoin now exceeds $20,000 and seems likely to grow even further beyond this price. According to Guggenheim Partners LLC, Bitcoin has the potential to reach $400,000, due in part to its scarcity.

For Coinbase, the value of Bitcoin is not the only criterion that could motivate an IPO. The growing interest of institutional investors is probably a more favorable growth factor.

Concerning the rise of Bitcoin, the CEO of the exchange prefers to call for a certain caution. In a blog post, Brian Armstrong reminds us that an investment in cryptocurrencies is “not without risk”.

“While we are always pleased to see an increased interest in crypto, it is also significant to note that we are not only in a period of high volumes, but also of price volatility,” he insists.

This message is particularly aimed at new entrants to crypto and those likely to enter the market soon. Coinbase therefore “warns investors who might focus on short-term speculation”.

Indeed, “crypto can be a volatile asset class – often more so than the types of traditional financial instruments that most investors are used to,” says Armstrong.