Among the most anticipated events of the year on Wall Street, we can mention the IPO of the cryptocurrency exchange platform, Coinbase. It will enter the Nasdaq with a valuation of 100 billion dollars. The day before the IPO, Bitcoin (BTC) soared to a new all-time high of $62,377.
Coinbase is the first company devoted entirely to cryptocurrencies to be listed on a US stock exchange. It is listed under the ticker symbol COIN and its stock has a reference price of $250 a share, a price set on Tuesday by Nasdaq.
Coinbase chose not to go public with a traditional IPO, but with a direct listing, which allows it not to raise new money while offering existing shareholders, founders, employees and historical investors, the opportunity to sell their stakes on the market.
The IPO is being led by Goldman Sachs, Wall Street’s most prestigious institution, founded in the mid-19th century and itself worth $120 billion.
On Tuesday, the group said in a stock exchange filing that about 130.7 million shares would be floated today. Estimates vary depending on the method of calculation, but its capitalisation is expected to be between $70 billion and $100 billion, which would be the biggest IPO for a US company since Facebook in 2012.
Coinbase, a fast-rising start-up
Founded in 2012 in San Francisco (California) by Brian Armstrong and Fred Ehrsam, the platform allows users to buy and sell about 50 cryptocurrencies, including bitcoin and ether.
It has nearly 56 million users and just over 6 million people transacting each month, according to estimates of its first quarter results, released in early April.
The platform also offers excellent transaction security. Indeed, founder Brian Armstrong, 38, was in charge of payment security at Airbnb.
The world turns to cryptocurrencies
Bitcoin was worth 10,000 euros in October, 20,000 in December and over 52,000 on Tuesday. Over the past year, the price of the crypto asset has risen from $6,500 last April to over $61,000 in mid-March. The start-up has therefore taken full advantage of bitcoin’s meteoric rise.
Bitcoin is not the only crypto-currency to have surged, as have ether, Litecoin and Stellar Lumens.
“As bitcoin has more than doubled in the last six months and crypto-currencies have become more popular with large investors, it can be clearly argued that they are becoming increasingly popular with the general public,” says Michael Hewson, chief analyst at CMC Markets UK.
As a result, Coinbase’s revenue has increased almost tenfold in the space of a year, to $1.8 billion in the first quarter, according to group estimates. Its profit, in the range of $730 million to $800 million, increased 25-fold.
The success of cryptocurrencies and Coinbase has given rise to competing projects: the boss of Californian cryptocurrency exchange Kraken told CNBC last week that he hopes to take his company public next year.
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