Leading cryptocurrency brand, Coinbase, has reportedly submitted a draft registration statement for Form S-1, indicating their intention to launch an IPO. The San Francisco-based company revealed this in a blog post, stating that it submitted a draft registration statement on Form S-1 with SEC, which will be made public after review and approval.
The digital currency space have been active on the markets recently, with the listing of crypto miners and Bitcoin holding companies. However, Coinbase’s offering will be the first-of-its-kind for a company that is synonymous with Bitcoin and cryptocurrencies. The public offering also reiterates the strength of cryptocurrency platforms.
The decision by Coinbase to file for an IPO comes amidst a rally in crypto markets. Bitcoin recently set a new record, surpassing the $20,000 mark, as it blew past $23,000 earlier in the week. The rally is also significant for Coinbase’s business, as investors who dismissed the exploits of cryptocurrency in 2017 now have a change of mind about crypto markets and look set to pour money into the ecosystem.
Over the years, Coinbase has grown to become a leading name in the cryptocurrency space. Started by Airbnb alum Brian Armstrong in 2011, the company has stayed true to its goal of creating an open financial system, mainly deriving revenues from two sources – operations as a crypto exchange for customers and institutional investors and its custody business, where it offerscustodial services for digital currencies to institutions and banks.
Coinbase Pro, the company’s institutional trading arm, currently ranks as the biggest crypto exchange in North America based on the volume of figures traded. Another side to the company’s success is that its fortunes are tied to the value of Bitcoin.
According to a Bloomberg report, Coinbase generated $17 million in revenue in 2016, a figure that skyrocketed to $923 million by the end of 2017 due to the exponential increase in prices of cryptocurrencies. Expectedly, Coinbase’s revenues and operations was significantly affected by the subsequent slump in cryptocurrency prices, with the company laying off 30 employees in 2018 as it was only able to generate $520 million in revenues.
Despite the mix fortunes of Coinbase, the company has managed to remain profitable for over three years, making it a catch for investors. Crunchbase recently revealed that Coinbaseraised over $547 million from an assortment of venture capitalists, institutions, and prominent individuals.
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