Coinbase, the United States digital brokerage firm for cryptocurrency has filed to go public. It is happening at the right time with the momentum of the cryptocurrency world. The company noted that its exchange for cryptos like Bitcoin, Ethereum, and more, has 43 investors and commands about $455 billion in trades. It will list in NASDAQ via direct listing and that means the typical investment bankers would not be doing any orchestration. I have noted that technologies will make such investment banking services less needed since information asymmetry, which used to make them the high priests of the market, has been reduced.
A case in point: why pay investment bankers so much to take a company public when web companies can be independently assessed on how they are doing? In the past, investment bankers were evidently key to serve as buffers. But today, from Alexa, from apps downloads, and other secondary data, investors can make sense of the health of a business without the old high priests like GS guiding them. That explains why most of these firms disintermediate Wall Street banks, and go straight to the trading platforms on IPO days.
That the Securities and Exchange Commission (SEC) approved for Coinbase to join the big board does imply that crypto has been market-baptized. You cannot say that it is illegal when NASDAQ allows it to trade under the blessing of the SEC. So, Bitcoin and others are here to stay, irrespective of how any nation feels. People, Nigeria’s central bank cannot wait for approval from the IMF, in ten years, before it sees what U.S. Federal Reserve and future-looking apex banks see: regulate, not prohibit, cryptocurrency. The crypto-economy is here because the $billions are already counted, not in coins, but in real dollars, as Coinbase begins trading soon.
From the filing, I noticed this for the company; No Physical Address for Headquarters. Yes, the company is a remote-first company and has no physical address to list. Yes, it did not list any headquarters address in its filing. This world is changing very fast; commercial real estate investors, now is the time to bring hybrid-designs which can be converted from commercial to residential buildings with ease.
People, very soon, physical addresses will disappear in business cards for those who still carry those!
The recent Bitcoin bull run helpedpull in a profit of $322 million on revenues of over $1.2 billion in 2020, putting the cryptocurrency giant in a strong position as it prepares to sell its shares to the public in its upcoming direct listing on the Nasdaq.
The figures, disclosed in an S-1 regulatory filing, give the first detailed look at the financial performance of Coinbase, which launched in 2012 as a user-friendly way for consumers to buy, but which has since added a and a variety of banking-like services for the burgeoning cryptocurrency industry. Coinbase says it has seen $456 billion in lifetime trading volume on its platform.
The company first disclosed its intent to go public in December.
Coinbase’s 2020 profit of $322 million compares to a loss of $30 million in 2019, and its 2020 revenue jumped 140% from the $533 million it earned in 2019.
The jump is not surprising given that Coinbase earns the bulk of its revenue on trading commissions, and that interest in cryptocurrencies surged late last year as therose from around $10,000 in September to over $30,000 by the end of the year. Bitcoin is currently trading around $50,000.
Glossary for the Cryptocurrency Economy
The company explains the risk in this business, from the S-1 filing: “There is no assurance that any supported crypto asset will maintain its value or that there will be meaningful levels of trading activities. In the event that the price of crypto assets or the demand for trading crypto assets decline, our business, operating results, and financial condition would be adversely affected. A majority of our net revenue is from transactions in Bitcoin and ethereum. If demand for these crypto assets declines and is not replaced by new demand for crypto assets, our business, operating results, and financial condition could be adversely affected,”---
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