What a day for cryptocurrency enthusiasts! Coinbase just filed confidentially for an initial public offering — following a series of all-time highs from bitcoin (CCC:BTC). So what do investors need to know about a Coinbase IPO? And why does this news matter?
To start, those unfamiliar with Coinbase should understand that it is the leading exchange for cryptocurrencies. As one writer tells it, the whole business started as a simple way for consumers to purchase bitcoin. Since its founding in 2012, it has gained in relevancy, following the trajectory of the broader crypto space.
With that in mind, here are 11 things to know about the Coinbase IPO:
- This is not the first time investors have heard about a potential Coinbase IPO. Over the last few months it has been shaking up its C-Suite and making strategic acquisitions.
- The official announcement of the Coinbase IPO came today through a company blog post.
- In it, Coinbase simply shared that it had filed a form S-1 confidentially with the U.S. Securities and Exchange Commission.
- Coinbase did not shed any light on what path to coming public it will take.
- Many crypto enthusiasts and supporters of a Coinbase IPO are not likely to support a traditional IPO.
- This has created some speculation that Coinbase will choose a direct listing, following in the footsteps of Spotify (NYSE:SPOT) and others.
- However, Co-Founder Fred Ehrsam has also suggested that the Coinbase IPO could happen through offering digital tokens on blockchain.
- As Jeff John Roberts wrote for Fortune, it is not clear if the SEC would allow that.
- Investors have been looking to piece together more info, especially as bitcoin is particularly hot.
- Earlier today, the crypto hit a new all-time high above $23,500.
- Importantly, Coinbase makes most of its revenue through trading commissions.
Why the Coinbase IPO Matters Right Now
Investors likely appreciate the timing of the Coinbase IPO news, or at least they should.
The last several months, and especially the last several weeks, have brought a flood of institutional support to the cryptocurrency space. Major banks and Wall Street firms have weighed in positively. Citibank set a price target of $318,000 on bitcoin. Guggenheim set one at $400,000. PayPal (NASDAQ:PYPL) and Square (NYSE:SQ) are working to better incorporate bitcoin on their payments platforms. Leading investors and billionaires like Paul Tudor Jones are turning bullish on the space.
And since the end of November, we have seen bitcoin continue to rocket higher, setting a series of record highs. For crypto bulls then, the Coinbase IPO is another milestone in legitimacy for the space. It will also be an interesting way to gain access to a company behind it all.
So what else do investors need to know here? Because of the confidential filing, it will be some time until investors learn more about the details. However, we do know that the last funding round left Coinbase at a valuation near $8 billion. That alone means the Coinbase IPO should be on your radar.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.