The large US crypto exchange, Coinbase, may soon become the first company of its kind to be traded on Wall Street. Last Thursday, the company announced from San Francisco that it had submitted a confidential application to the US Securities and Exchange Commission (SEC) to list its shares as a public company. On the day that the price of Bitcoin rose above $ 23,000 and set an all-time high, Bitcoin, the leading currency in the cryptocurrency market, recorded a jump of more than 200% in its dollar price since the beginning of the year.
According to a report on the Business Insider website, a source close to the matter said that Coinbase had hired the services of the investment bank Goldman Sachs to lead the preparations for its listing on the American stock market. The crypto company has not yet commented on the report. Goldman Sachs, which already in 2018 set up a cryptocurrency trading room, is considered more open than other investment structures in its treatment of Bitcoin as an investment channel.
The Reuters news agency reported as early as last July that Coinbase plans to become a public company, and is considering the possibility of a direct listing of its shares for trading instead of an initial public offering (IPO). The company has not yet publicly announced whether the move it is planning will be IPO or direct listing. The transformation of Coinbase into a public company, whether through an IPO or through a direct listing of its shares for trading, could have tremendous significance for the crypto market. Such a move, involving regulators, bankers and institutional investors, would bring the crypto exchange closer to the mainstream of the capital market.
Valuation of $ 28 billion
If it eventually goes out for an IPO move, the coinbase issue could be one of the largest in the U.S. stock market in the coming year. The American research company Messari, which specializes in collecting and analyzing information about the crypto market, published an estimate on Thursday that if Coinbase makes an initial public offering, the share price of the offering may reflect a market value of $ 28 billion for the crypto exchange.
Messari’s valuation takes into account all of Coinbase’s business activities, which include trading services, custody and instant debit cards in cryptocurrencies. The research firm noted that Coinbase recently added to its board of directors senior venture capitalist Mark Andersen, one of the founders of the Andreessen-Horowitz Fund, Gokol Rajram, who is one of the directors of the food delivery company DoorDash, which was issued on the New York Stock Exchange this month, valued at $ 32.4 billion. And Kelly Kramer, the former chief financial officer of Cisco. It is estimated that the changes in Coinbase’s board of directors were made as part of the crypto exchange’s preparations for an IPO on Wall Street. According to Mira Cristiano, an analyst at Masari, “The issuance of Coinbase shares could serve as an anchor for future valuations of crypto exchanges.”
Coinbase is considered one of the largest crypto exchanges in the world, with about 35 million users and a trading volume estimated at $ 1 billion per day. The company’s custody business grew this year, with the volume of crypto assets held in them currently estimated at $ 20 billion, compared to $ 7 billion at the end of 2019.
In the last round of investment by Coinbase, which was completed in October 2018, the crypto exchange raised $ 300 million at a company value of approximately $ 8 billion. This round was completed just one year after the company became a “unicorn” with a valuation of $ 1 billion. Coinbase, founded in 2012, has raised a total of more than $ 525 million in its eight years of operation. The company, which is founded by Fred Erasm and CEO Brian Armstrong, employs more than 1,000 people.
Operates in more than 100 countries worldwide
From its inception, Coinbase has partnered with U.S. regulators. In 2017, the company received a Bitlicense license, which allowed it to operate in New York State. In total, the company currently operates under license in 44 U.S. states as well as the capital Washington. In addition, its platform is open to users from more than 100 countries outside the US.
The growth of the crypto company has involved quite a few obstacles. For more than two years, the company has been waging a battle with the US Internal Revenue Service, IRS, which already in 2016 demanded access to all Coinbase user accounts. At the end of a legal battle, the company provided the authority with access to a limited number of accounts in 2018.
This year Coinbase got into another controversy. Last September, after a wave of protests erupted in the U.S. against institutionalized racism and police violence, founder and CEO Armstrong posted a blog post in which he wrote that the company he heads would not interfere in social or political issues, but would focus solely on building its products. Armstrong offered generous retirement packages to company employees whose policies were not acceptable to them – and as a result, about 60 Coinbase employees retired from the company.