After months of speculation, Coinbase has finally set a date for one of the most anticipated events in the cryptocurrency ecosystem: its direct listing and the disclosure of financial results for the first quarter of 2021.
On April 1st of 2021. the Securities and Exchange Commission (SEC) declared effective Coinbase’s registration statement on Form S-1, enabling the cryptocurrency exchange to start trading of its Class A common stock on Nasdaq Global Select Market under the ticker “COIN”.
While the reference price is still to be announced and as such, investors will need to wait for it to be disclosed on April 13 according to Bloomberg, the exchange will be making its financial results for Q1 of 2021 public 8 days before the start of the direct listing, allowing potential investors to use it as a guide.
As 2021 has seen one of the biggest bull runs in the history of the crypto market, it is expected that the financial results will reflect the increasing popularity of the platform over the last few months, which is expected to be one of its best quarters.
While it has initially believed that Coinbase would be going public through an Initial Public Offering (IPO), as more information came to light it became clear it would be making use of a Direct Listing approach instead.
How Much is Coinbase Worth?
There has been much speculation on how much Coinbase is valued, with some experts valuing it somewhere between $90 and $104 billion as the result of analyzing part of the private share transactions that were taking place back in February.
On March 17th, Coinbase shared that the average price of private transactions was $343.58, valuing the company around $68 billion, significantly higher than its value in the last fundraiser in 2018 which saw it valued at $8 billion.
The information disclosed with the Financial Reports for Q1 of this year is sure to have an impact on the initial price of the shares, probably increasing it due to the success of the crypto market ever since December of 2020 and given Coinbase’s position on it.
The last financial report was published by Coinbase as part of the S-1 regulatory filing with the SEC, which showed the company had a total profit of $322 million during 2020. The revenue during the same period was over $1.2 billion, more than twitch those of 2019.
A Milestone for Crypto
Coinbase’s debut on Nasdaq will make it the first major cryptocurrency exchange to take place on Wall Street, which has become increasingly open to investing in cryptocurrencies after years of widespread skepticism.
While the use of a direct listing will allow the acquisition of Coinbase shares by interested parties, the offer will be limited by employees and investors who hold shares at this time and the interest in selling, which will prevent whales from acquiring them immediately upon listing.
The relationship between the crypto industry and the SEC has been bumpy over the last years as the entity issued complaints against Ripple and LBRY over the last months, becoming the target of widespread criticism among crypto enthusiasts.
With Coinbase going public, the cryptocurrency market is likely to gain more visibility and trust from institutional and private investors who have seen it as a highly volatile and risky investment with ties to shadowy activities, a perception that mainstream media has repeated over and over.
As the market capitalization of the cryptocurrency market continues to get closer to $2 trillion, news about crypto as a legitimate investment continues to normalize in news outlets that originally took a skeptical position, which is a reflection of the progress the crypto industry has achieved over the past years.