Coinbase has a reputation for being a very user-friendly way to buy and sell cryptocurrencies using fiat currency. It has over 43 million verified users across the world and has processed more than $456 billion in transactions to date.
On January 28, 2021, the cryptocurrency exchange made an official announcement about its intention to go public. The SEC published Coinbase’s Form S-1 on February 25, outlining plans to become publicly traded through a direct listing rather than a traditional IPO.
When can I buy Coinbase stock?
Coinbase stock will become publicly listed on the Nasdaq, using the ‘COIN’ ticker symbol. There is no official date announced for this listing as of yet.
How much will Coinbase stock cost?
It is currently unclear what the initial listing price for Coinbase might be. Based on a lofty $100 billion valuation, the price per share would be in the $375 range.
Through its S-1 filing, potential investors were able to get a glimpse into the financial performance of Coinbase and its plans going forward.
The form outlined the company’s belief that operating expenses will significantly increase going forward, which may lead to a lack of consistency in profitability or the generation of positive cash flow. Coinbase went from a $30.4 million net loss in 2019 to a net profit of $322.3 million in 2020. Its revenue rose significantly year-over-year from $533.7 million in 2019 to $1.3 billion last year. Most of this revenue bump came in the second half of the year as the cryptocurrency markets rose significantly.
Expectations of the initial value of the company when it goes public varies, going as high as $100 billion in some cases. It does have cryptocurrency assets as part of its balance sheet, with these values tending to fluctuate significantly due to the volatile markets.
While Coinbase’s growth is impressive and it certainly looks like a good option to be a publicly-traded company, a lot of its success appears to be down to the performance of the overall cryptocurrency market.
Since its humble beginnings in 2012, Coinbase has managed to capture a large portion of the cryptocurrency market, making it the largest cryptocurrency exchange in the U.S. With the likes of Bitcoin becoming more mainstream and many people looking to invest, the popularity of user-friendly exchanges like Coinbase is only going to grow.
The company is also well-positioned to capitalize on the growing popularity of cryptocurrencies among retail investors, many of whom would prefer not to have to buy and hold specific tokens. The likes of Coinbase shares could be seen as an easy and somewhat less speculative way to invest indirectly into this burgeoning sector. It will be the first U.S. exchange of its kind to go public and will likely be among the most notable tech listings this year.
Naturally, there is still a lot of divided opinions about the future of the cryptocurrency space. Some believe that it is a fad, while others label the likes of Bitcoin as being a store of value and the future of money.
The growth of Coinbase will be closely aligned with whether the cryptocurrency space manages to continue growing significantly or if it starts to fade away. If the sector grows exponentially in the years to come, then a Coinbase investment could pay off handsomely.
A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free trial now!
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Andrew is a contributing writer to MyWallSt. He is a full-time finance writer, having spent time working in the industry. He studied Economics and Finance and has been fascinated with the financial markets since his teens. The first stock that Andrew bought was Apple, reflecting his love for its products.