Coinbase To Become Publicly-Traded Via Direct Listing of Shares
In a Jan 28 blog, Coinbase unveiled plans to become a publicly-traded company in 2021 via a direct listing of its shares. The popular exchange stated that it would pursue a direct listing of its Class A common stock.
The announcement comes as a follow-up to the leading exchange’s earlier move to seek regulatory approval for a public listing. In Dec of last year, Coinbase confidentially filed a draft registration statement on Form S-1 with the SEC, laying down its IPO groundwork.
Since the S-1 is not yet publicly available, investors can only speculate on the precise timing for listing the common stock and under which ticker this process would occur.
Coinbase currently boasts over 43 million registered users and closed 2020 with approximately $90 billion in assets. The move to go public by way of a direct listing now awaits the SECs review and go-ahead.
The San Francisco-based crypto exchange’s announcement comes when both the IPO market and cryptos are booming. Bitcoin prices are red-hot at the moment, and many tech IPOs have taken place successfully in recent months.
The surge in demand for IPOs, along with a resurgent crypto market, could play into the exchange’s hands; Coinbase will now likely seek a much higher valuation than its current estimated $28 billion, owing to these favorable factors.
Coinbase IPO To Further Legitimize Cryptocurrency
Coinbase’s decision to pursue an IPO marks a monumental milestone for the crypto space. The exchange is already one of the largest gateways for crypto trading globally, and going public will only increase its acceptance and influence in the industry.
Since it opened its crypto business, Coinbase has experienced first-hand the difficulties of spearheading the trading of an asset class viewed with suspicion by financial watchdogs.
The trading platform’s IPO represents a landmark in the digital asset’s sector quest for legitimacy and acceptance by the traditional financial establishment.
In 2012, when Coinbase launched, many financial experts and retailers considered bitcoin a fad, while many government officials associated the asset with money laundering and crime. BTC is now widely accepted as a viable store of value with growing use cases as a portfolio hedge.
Coinbase becoming a publicly-traded company with investors’ and regulators’ backing would also increase crypto adoption among institutions and retail traders.
Gearing Up For an IPO
Unconfirmed reports that Coinbase was eyeing a public listing have been floating around since at least last July.
Many crypto enthusiasts suspect that the exchange started laying the groundwork for its IPO months ago with a series of boardroom shuffles, the latest coming in Dec of last year.
The crypto trading firm’s co-founder Fred Ehrsam even teased the idea that Coinbase was “spiritually” built to go public in an exclusive Coindesk interview from May 2020.
Coinbase has also acquired several custody firms in an apparent attempt to increase its capacity to safely store large amounts of digital assets ahead of the public listing.