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Coinbase files confidential prospectus amid Bitcoin surge

San-Francisco based crypto currency exchange Coinbase Global Inc has filed a confidential prospectus for a stock listing with the United States Securities and Exchange Commission (SEC), the company said in a blog post. If approved, Coinbase will be the first listed crypto currency exchange in the world while several crypto-firms have been trading publicly since last year.

Founded in 2012, Coinbase is the second largest crypto exchange in the world with more than 35 million users in over 100 countries. It processes over $2.8 billion in crypto trades on a daily basis, according to CoinGecko.

Since the prospectus is confidential at present, details on the issue size, the company’s revenues and operations are in the dark. Since the firm has filed an S-1 form with the SEC, the contents of the document will not be available until three prior to the investor roadshow. It is unclear whether Coinbase will opt for an initial public offering or a direct listing on stock exchanges.”The Form S-1 is expected to become effective after the SEC completes its review process, subject to market and other conditions,” the company said in its blogpost.

In 2018, the company was valued at $8 billion raising funds from Tiger Global, Andreessen Horowitz, DFJ Growth and IVP  to name a few. In August, the company shuffled its board to include venture capitalist Marc Andreessen and Google veteran, Gokul Rajaram ahead of its SEC filing. Last week, it added Kelly Kramer to its board of directors, who is a veteran Silicon Valley executive and former chief financial officer of Cisco.

Bitcoin hits historical high

Since 2018, Bitcoin prices have surged and long time institutional investors who were wary about crypto currencies have now turned optimistic. As of date, the price of Bitcoin hit an historical high of $23,000. This price surge over the last two years means that Coinbase’ revenues as an exchange would have naturally grown during this time period as well as its valuation.

According to Messari, Coinbase could command a $28 billion valuation on its listing, while its shares in secondary markets have been recently trading at a valuation of $7-8 billion.

In a recent blogpost, Coinbase co-founder and chief executive officer, Brian Armstrong warned investors to be mindful of the volatile nature of Bitcoin prices. “While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk,” he said. Armstrong added that Coinbase will ensure to caution investors who focus on short-term speculation while providing transparency to the customers to make better decisions during times of such volatility.

“Coinbase filing for IPO is a very positive step for the entire crypto industry. It also shows the opportunity in the crypto sector. India should take a cue from this and encourage the creation of Billion dollar crypto startups in India,” said Nischal Shetty, chief executive officer of Indian crypto exchange, WazirX.

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