18 Dec 2020 Marsha Tusk
Coinbase Announces IPO Filing, Bringing Crypto To Wall Street
One of the largest and most popular names amongst crypto exchanges, Coinbase, has brought the crypto world one step closer to Wall Street by filing a draft registration statement with the Securities and Exchange Commission (SEC).
SEC Form S-1 is the first registration form for new securities required by the SEC for U.S.-based public companies. The form usually means that the company that files it in is ready for an initial public offering, or an IPO. While crypto mining companies and Bitcoin holding services are already listed on the stock markets, Coinbase would be the first large-scale crypto exchange listed on markets like the New York Stock Exchange (NYSE).
However, Coinbase can start the IPO as soon as the SEC reviews and approves the Form S-1 submission, which can take some time.
Coinbase’s IPO filing comes amid a strong price rally for the world’s number one cryptocurrency, Bitcoin. Bitcoin went from the foothills of $20,000 to record an all-time high of $23,642.66 in just a day. Another important factor for Coinbase`s business is the return of institutional investors that abandoned the crypto market after 2017, and renewed their financial activities in the crypto ecosystem.
A major downside to the success of Coinbase is that company`s assets are tied to the price of Bitcoin, which causes drastic fluctuations in revenues along the way. In 2016 Coinbase reported just $17 million in revenue, but the revenue was inflated to $923 million until the end of 2017, dictated by the Bitcoin`s rally. In 2018, Coinbase suffered from the BTC`s downtrend, marking nearly $400 million decrease in revenue compared to 2017. The financial consequences caused the lay-offs of 30 employees and the shutting down of the Chicago office. The downtrend continued in 2019, which led to more layoffs and a 22,5% drop in revenue from the previous year for the Coinbase’s UK office.
Coinbase did not provide much information about the IPO form filing on their website, but crypto enthusiasts are asking themselves if Coinbase is acting against the nature of cryptocurrencies. Many crypto fans believe Coinbase is “cashing in” on the hype around cryptocurrencies and their peer-to-peer nature, described in Bitcoin’s 2008 whitepaper.
Seasoned traders are considering Coinbase as “the Facebook of Cryptos” as the exchange was ready to cooperate with law enforcement bodies in Washington D.C., which turned away most of the crypto-oriented communities. Also, the exchange and its CEO Brian Armstrong received a portion of bad press pressure, after the exchange left the Blockchain Association and the severance packages, offered to Coinbase employees, in order to cut costs on wages in September 2020.Bitcoin Coinbase SEC Crypto Market Exchanges News crypto market monitoring Bitcoin price exchange SEC Security and Exchange Commission Exchanges USA