Earlier this month, Coinbase announced that its filing with the Securities and Exchange Commission (SEC) to list its shares on the Nasdaq, under ticker symbol COIN, had been approved. The public listing of Coinbase will thus represent a seminal event in the digital asset industry.
Coinbase, the leading digital asset exchange in the US, has boomed. The business has grown rapidly as interest in digital assets like Bitcoin, Ethereum, as well as altcoins, has experience skyrocketing interest from both retail and institutional investors. According to the S-1, since Coinbase launched through December 31, 2020, the company generated over $3.4 billion in total revenue, largely from transaction fees by retail users and institutions. For the years ended December 31, 2020, and December 31, 2019, Coinbase generated total revenue of $1.3 billion and $533.7 million, respectively, and a net income of $322.3 million in 2020 compared to a loss the year prior at $30.4 million.
Perhaps even more impressive, it was recently reported that Coinbase generated total revenue of $1.8 billion in Q1 2021 alone.
As was recently highlighted by Lee Schneider, once shares in Coinbase are publicly traded, a sea change will have occurred in the US without most people recognizing it. As part of its S-1 filing, Coinbase defined the terms of the crypto lexicon – something that will most likely be used as a guideline going forward. Schneider also noted that the initial public offering provides a “measure of insulation from a regulatory challenge.” Of course, this insulation is not from any potential transgressions but it is a validation of the service it provides within an industry that really did not exist a decade or so ago.
Once the shares float, Coinbase will solidify itself in the crypto history books as a penultimate trailblazer that successfully navigated an opaque regulatory environment while helping to define an entire industry that continues to evolve. Expect Coinbase to morph into a platform for both digital assets as well as digital securities along with affiliated services that can now be streamlined as part of the ongoing digital transformation of the financial services sector.
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