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Coinbase listing details pull back the veil on bitcoin trading

(ATF) Coinbase, the biggest US cryptocurrency exchange, filed to go public via a listing on Nasdaq on Thursday February 25. The exchange made a profit last year and might be able to list at a value close to $100 billion – especially if the recent surge in the value of bitcoin continues.

Coinbase has been making reforms to secure approval from the US Securities and Exchange Commission (SEC) for a listing that would represent a landmark for cryptocurrency trading.

Coinbase noted that it has not received approval from regulators to trade cryptocurrencies that have been classified as securities in the United States. While bitcoin is considered a commodity by US regulators, most other cryptocurrencies have yet to be classified as commodities or securities.

In December, Coinbase shut down trading in the XRP cryptocurrency, after the SEC charged associated blockchain firm Ripple with conducting an unregistered securities offering.

Bitcoin ended 2020 up more than 300% and earlier this month hit a record high of $58,354 with a market value above $1 trillion.

Bitcoin has come off its highs since then as investors worried about the pace of the rally and following a tweet from Tesla founder Elon Musk saying the recent rise might have been overdone.

It was trading at just below $50,000 for most of Thursday.

Coinbase finances

The Coinbase filing provided the first detailed look at the firm’s finances since the San Francisco-based company was founded in 2012.

It showed Coinbase in 2020 pulled in total revenue of $1.3 billion, up from $533.7 million in 2019. It reported net income of $322.3 million, from a prior year loss of $30.4 million.

Coinbase, which was valued at more than $8 billion in its last private fundraising round in 2018, did not disclose the date when it plans to list shares on Nasdaq. It also did not disclose the price at which its stock has been trading recently in private markets. This will serve as a pricing benchmark when it goes public on Nasdaq.

Recent private market trades have reportedly been at levels high enough to justify an eventual $100 billion value for the company.

Coinbase is avoiding a traditional initial public offering where a company raises money by selling new shares, opting instead to go public through a direct listing where no new stock is sold and existing shareholders can sell stock.

It is among the most well-known cryptocurrency platforms globally, with more than 43 million users in more than 100 countries.

Andreessen Horowitz, Tiger Global, Ribbit Capital and Union Square are among Coinbase’s biggest shareholders, with the New York Stock Exchange, BBVA and ex-Citigroup chief executive Vikram Pandit also early investors.

Coinbase announced in December that it had confidentially applied with the SEC to go public.

Goldman Sachs, JPMorgan, Allen and Citigroup are advising on the listing.



Jon Macaskill

Jon Macaskill has over 25 years experience covering financial markets from New York and London. He won the State Street press award for 'Best Editorial Comment' in 2016


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