As anticipated, Coinbase has publicly filed an S-1 outlining its plans to complete an initial public offering (IPO) on the NASDAQ. Accrording to the filing, Coinbase intends to raise up to $1 billion and trade under the ticker symbol of “COIN.”
The filing shares that Coinbase is currently managing 2.8 million monthly transactions with 43 million verified users. During 2020, Coinbase added over 10 million new users. Lifetime trading volume stands at $465 billion with assets on platform of $90 billion. Since inception through December 31, 2020, we generated over $3.4 billion in total revenue, largely from transaction fees. Today, Coinbase integrates with more than 15 blockchain protocols, supporting over 90 crypto assets for trading or custody.
For the years ended December 31, 2020, and December 31, 2019, Coinbase reports total revenue of $1.3 billion and $533.7 million, respectively, and a net income (loss) of $322.3 million and $(30.4) million, respectively. Adjusted EBITDA of $527.4 million in 2020 and $24.3 million in 2019.
Brian Armstrong, CEO and founder of Coinbase, states in an introductory letter:
“Our goal is to build a portfolio of products and services with efficient capital allocation and to demonstrate repeatable innovation. We have done this before, taking the profits from our early products and services and reinvesting them into new products and services that we believe help accelerate our vision of the future.”
Armstrong states that Coinbase is building the infrastructure to power the “cryptoeconomy.” The mission is to create a platform that is the primary financial account for their users.
Plans for growth include global expansion, new products, and services. This is both for retail and institutional users.
The filing explains:
“We believe that we are in the early stages in the development of the cryptoeconomy. While we have grown rapidly, our growth has not been linear. Instead, it has come in waves aligned with crypto-asset price cycles which tend to be volatile and draw new customers, investment, and developers into the ecosystem, and typically lead to higher Trading Volume and Monthly Transacting Users, or MTUs, on our platform. For example, in 2020, as the price of Bitcoin increased from approximately $7,000 to $29,000, we experienced a correspondingly high increase in Trading Volume, which grew from nearly $80 billion in 2019 to $193 billion in 2020. We have observed four major crypto asset price cycles since 2010. Each cycle has had a variable duration ranging from approximately two to four years, and has increased the overall crypto market capitalization significantly from the prior cycle. In the three price cycles prior to the current one, which we believe we entered in late 2020, crypto prices have subsequently declined from each peak and settled at a trough higher than the prior peak. These cycles are visible when viewing the price of Bitcoin, the first and largest crypto asset, over time on a logarithmic scale.”
The public listing of Coinbase will represent a seminal event in the emergence of blockchain and financial services. Coinbase is the biggest name in crypto exchanges in the US and is well-positioned for future growth in the digital asset ecosystem. The IPO will be hotly watched by both the Fintech sector as well as traditional financial services.
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