The Strategist

Coinbase sets to go public

12/18/2020 - 11:05

Cryptocurrency exchange Coinbase announced that it has confidentially filed an S-1 form with the US Securities and Exchange Commission (SEC), necessary to go public. The company did not provide details of the proposed offering and its representatives declined to comment on the matter. Coinbase could become the first major cryptocurrency player to go public.
Coinbase's intention to go public was reported back in the summer, when Reuters quoted sources as saying that the company was planning a direct offering rather than an IPO. Now, Coinbase has not specified in the statement whether it plans an IPO or a direct offering. In a direct offering, the company directly begins trading its shares on the exchange, without the support of underwriters, and without having to go through the usual pre-IPO procedures. In order for Coinbase to go public, the SEC, after reviewing its operations, must approve it. In the case of a cryptocurrency company, it can be a slightly more complicated process than usual.
Coinbase was created in 2012, it is now one of the most prominent cryptocurrency platforms with more than 35 million users. The amount of assets placed on the platform is estimated at more than $25 billion. The exact valuation of the company itself is now unknown, but in 2018, after another round of funding raising, it was valued at $8 billion.
Kyle Samani, co-founder of cryptocurrency-focused hedge fund Multicoin Capital Management, called Coinbase's possible IPO a "big event" for the industry. "It's a watershed for this asset class, both in terms of its legitimisation and in terms of allowing investors to bet on the crypto industry without betting on a particular asset," he said.
Coinbase announced its intention to go public after Bitcoin first broke through the $20,000 mark this week before hitting $23,77,000. Bitcoin has more than doubled since the start of the year.