Coinbase’s Class A shares would list on the Nasdaq technology market. The US exchange reported earnings of USD 1.3 billion in 2020.
US-based Bitcoin exchange Coinbase is getting closer to listing its shares on Wall Street. They recently filed Form S-1, or Initial Registration Information Prospectus, with the Securities and Exchange Commission (SEC).
Coinbase notes that it opted for a direct listing of its Class A shares to go public. They also offered details of what the process will be like once the SEC authorizes it. Financial entities Goldman Sachs, JPMorgan, and Citigroup are advising the organization.
“Goldman Sachs will notify Nasdaq when our Class A common shares will be ready for trading. Then Nasdaq will calculate the reference price,” the exchange said.
If Goldman Sachs approves the trades at the stipulated price, Nasdaq will conduct a price validation check. They will do that according to their rules, as the statement they sent to the regulatory agency highlights.
Valuation that Coinbase May Achieve
There are various estimates of the possible valuation that Coinbase may achieve. In December, the Messari research firm put it at around USD 28 billion. Other investors have even claimed that the actual valuation could be USD 100 billion.
The SEC requires a protocol from all those based in the United States who wish to enter the stock market, with which Coinbase is complying. On the S-1 form, they include financial information about the company and basic information about their organization.
In a direct listing, anyone who owns shares in a company, including promoters, investors, and employees, can sell them. In other words, there are no new shares, but the operators work with the securities that already exist.
Coinbase Financial Data
The US exchange revealed that it made a total of USD 1.3 billion in revenue in 2020. That is more than twice the revenue that it earned in 2019 when it reached USD 533 million. In the last year, they have had 43 million verified users and almost three million active operators per month.
There has been USD 90 billion worth of assets on the platform and a trading volume of USD 456 billion since its inception in 2012. According to the information prospectus, Coinbase maintains operations in more than 100 countries.
The cryptocurrency community has attributed Coinbase’s fortune to the dramatic bullish run that Bitcoin experienced in 2020. Coinbase saw an increase in its trading volume for both institutional and retail Bitcoin investors.
Regarding Coinbase’s ownership structure, Brian Armstrong, CEO of the crypto exchange, only owns 11% of the company. However, he has a larger holding of Class B shares, which have governing power.
According to data from CoinGecko, Coinbase is the second-largest Bitcoin exchange, based on its trading volume in the last 24 hours. The information service indicates that the exchange is processing around USD 4.2 billion, behind Binance with USD 29 billion.
By Willmen Blanco