Coinbase Nears IPO
Good news for fans of Bitcoin and decentralized currencies — cryptocurrency exchange Coinbase is gearing up for its public debut this Wednesday on the Nasdaq. Analysts expect the fast-growing company at the center of the cryptocurrency boom to go public at a valuation of roughly $100 billion — more than the Nasdaq and New York Stock Exchange combined.
The massive valuation is an incredible rise from the 2012 company that began in a San Francisco apartment. Interestingly, founders Brian Armstrong and Fred Ehrsam met anonymously in a Bitcoin forum on Reddit.
But Coinbase’s valuation isn’t your average valuation. Coinbase is unusual because its market value rises in lockstep with the top cryptocurrencies. In fact, the company only turned a profit last year as institutional investors propelled Bitcoin and other cryptocurrencies to record highs. Bitcoin has risen over 750% in the past 12 months, and Ethereum has jumped over 1,100%.
Last week, Coinbase gave investors a first-quarter update and reported revenue in the first three months of 2021 skyrocketed to roughly $1.8 billion from $190.6 million in the same quarter a year ago. If that doesn’t make you see why analysts expect the company to debut at a monumental valuation, last week, Coinbase said it expects a first-quarter profit of up to $800 million, more than double its total 2020 earnings.
Coinbase is arguably the most prominent crypto exchange in the world, and as institutional demand for crypto continues to surge, the company could continue to prosper. It’ll be interesting to see what happens to the company’s stock when they go public tomorrow on the Nasdaq.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.