As Bitcoin surges, cryptocurrency giant exchange Coinbase aims to go public
By: Ico Booster Team
Tags: Btc, Exchange, SEC, Coinbase, Bitcoin

The announcement comes as interest in bitcoin and other cryptocurrencies has soared during the coronavirus pandemic. Investors have found such currencies attractive as the US dollar weakens.

Cryptocurrency giant Coinbase announced on Thursday that it has confidentially filed for a public offering, becoming the latest in a parade of high-profile startups to pursue an IPO in 2020.

Coinbase’s announcement comes at a time when both the IPO market and cryptocurrency prices are red-hot. The price of Bitcoin is currently near a record $23,500, and trading volumes are surging — a great deal for firms like Coinbase, which makes the bulk of its revenue from trading commissions.

In its IPO announcement, which came in a company blog post, Coinbase did not provide details about how it would structure its offering. A traditional IPO, whereby banks arrange for institutions to get first dibs on the stock for a fixed price, would likely be anathema to many crypto enthusiasts and Coinbase employees.

In a recent interview, Coinbase co-founder said during an interview to Fortune the company is “spiritually” built to go public via an offering involving digital tokens on a blockchain — the ledger technology that underpins Bitcoin, and which crypto enthusiasts view as the future of financial infrastructure.

It’s far from clear, however, whether the SEC would sign off on such an arrangement. If the agency refuses to do so, another option would be for Coinbase to pursue a direct listing in which it sells shares directly to the public. Indeed, this model was recently employed by Spotify and Slack.

Coinbase’s IPO will give its early shareholders, including CEO Brian Armstrong and venture firm Andreessen Horowitz, an opportunity to cash out. But it will also represent a milestone in the crypto industry’s long-running quest for legitimacy. The company has yet to reveal how much money it is making, though sources close to Coinbase say it has regularly turned a profit in recent years. The company’s last fundraising round, for $300 million, valued it near $8 billion. That figure, however, is from 2018, and it’s likely Coinbase will seek a much higher valuation owing to the booming crypto market and the recent surge in demand for IPOs.

When Coinbase launched, many dismissed Bitcoin as a fad, while many government officials regarded it as primarily a vehicle for crime and money laundering. While some policymakers — and President D. Trump — continue to treat the digital currency with hostility, the past two years have seen a surge in acceptance by mainstream institutions. Indeed, a new crypto fund run by cofounder Ehrsam has attracted investments from the likes of the endowments of Harvard and Stanford universities.

Meanwhile, Coinbase has made several acquisitions in recent years to help its diversify its revenue model beyond trading fees, including custody operations.

The company has been dogged by recent controversy, however, related to a decision by CEO Armstrong to publish a blog post declaring Coinbase to be an “apolitical” company. The post came in the midst of upheaval related to the Black Lives Matter protests and was regarded by many as tone deaf and insensitive. The controversy gained further traction last month when the New York Times published a piece describing how numerous Black employees had left Coinbase, with some of them citing racist attitudes among their coworkers.

Having a look at google trends, it is not even really clear where the attention to Bitcoin is coming up so rapidly these days. Anyway, at the end of the game only exchanges are taking benefits from this huge “unexpected” BTC surge. Sometimes it’s probably better being skeptical about coincidences.

FD

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