The company still awaits a response to the application that it filed with the SEC. Research firm Messari considers that the company has a valuation of USD 28 billion.
Coinbase is an online platform that serves as a digital wallet where users can keep their cryptocurrency holdings. It also allows them to see their balance and the evolution of the value of their cryptocurrencies.
This US exchange recently confirmed that it will go to the stock market through a direct listing rather than through an Initial Public Offering (IPO). They are awaiting a response from the Securities and Exchange Commission (SEC) for the application to continue with the regulatory process.
After versions of a possible IPO, the company made official the mechanism that it will use to enter the stock market. “Coinbase wants to become a public company listed on the stock exchange through a direct listing proposal of its Class A common shares. We expect this listing proposal to occur through a registration statement on SEC Form S-1,” Coinbase explained.
Those companies that want to go public and trade stocks use IPO and direct listing mechanisms. There is no creation of new shares in the mechanism that Coinbase chose, but they operate with the existing securities, without intermediaries. Promoters, investors, and employees who own shares of this type can trade them directly with the interested public.
On the contrary, in IPOs, there is the issuance of new shares, which brokers, investment banks, mutual funds, and insurance companies then manage. In December, Coinbase was considering entering the stock market through a direct listing rather than an IPO. The exchange did not explain the reasons that led it to make that decision.
Coinbase at a Crucial Moment in the Stock Market
All this information appears at a crucial moment in the stock market, which remains in turmoil. This has happened because RobinHood, Interactive Brokers, and Ameritrade restricted the purchases of securities of GameStop. The reason for this was that the Reddit group WallStreetBets caused a rally for the video game chain’s stock.
Many wonder whether what is currently happening on Wall Street will benefit or harm Coinbase. The rise in the price of Bitcoin and the growth in the acceptance of cryptocurrencies worldwide could favor the exchange.
Coinbase’s valuation was USD 8 billion in 2018, but could currently be around USD 28 billion, according to Messari. The research firm arrives at that amount given that it is one of the “most prominent exchanges”, according to analyst Mira Christanto.
According to cryptocurrency analytics platform CoinGecko, Coinbase is the second exchange that most operators use. They have a daily trading volume of USD 5.5 billion. Besides, the exchange operates with 43 cryptocurrencies and 125 trading pairs.
The exchange recently acquired Bison Trails, a fully-managed blockchain infrastructure provider. The company also purchased the Routefire platform, helping to significantly boost its operations.
Bison Trials, which builds cross-blockchain integration tools, is now developing the Coinbase product suite. Meanwhile, the Routefire platform is in charge of developing tools and services for the cryptocurrency exchange.
By Alexander Salazar
