The company will be listed on NASDAQ next week. You don’t have to buy directly to profit from fluctuations in an asset.
On April 14, Coinbase Class A common shares will begin trading on the NASDAQ Global Select Market under the ticker “COIN”. Crypto exchange Currency.com will issue a token for the company’s securities, which will make it possible to capitalize on their volatility without buying the asset directly.
History
Coinbase was founded in 2012 by Brian Armstrong, Fred Ehrsam, and Ben Reeves in San Francisco. Reeves later left the team due to disagreements about the future of the project. Prior to that, Armstrong was Chief Engineer at Airbnb, Ersam was a trader at Goldman Sachs. In the summer of 2012, they entered the Y Combinator business incubator, and in the fall they presented their service for buying and selling bitcoins using bank transfers.
Over 9 years, Coinbase has attracted more than $ 500 million in investments, the largest investors being Andreessen Horowitz, Ribbit Capital and Union Square Ventures. In 2018, Tim Wagner, Amazon’s cloud chief executive, became the vice president of development for the crypto exchange.
Financial performance
Before listing, the company released financial results. It became known that Coinbase’s income for the first quarter of 2021 amounted to $ 1.8 billion, profit – $ 730-800 million.At the same time, for the whole last year, the profit of the crypto exchange was 2.5 times less, $ 322.3 million, and a year earlier it incurred losses of $ 30 million
Trading volume on Coinbase in the first three months of 2021 was $ 335 billion, while in the fourth quarter of 2020 it was only $ 89 billion. According to the exchange, it now has 53 million verified clients and 6.1 million active users. Since the previous reporting period, the indicators have increased by 32.5% and 118%. The volume of assets for the site is $ 233 billion, of which $ 122 billion are attributed to institutional investors.
Listing of shares
In January 2021, Coinbase began selling its shares on Nasdaq Private Markets. And if at the end of 2018, according to the results of a round of venture financing, the crypto exchange was valued at only $ 8 billion, then on January 29 of this year its estimate reached $ 54 billion.
In early February, the site sold several more blocks of shares – the last one at $ 373 per share. This raised the company’s valuation to $ 100 billion. It became possible that Coinbase would go public with the highest valuation since the Facebook IPO. However, in mid-February, the company said it was valued at approximately $ 68 billion in recent deals.
Coinbase chose to go public bypassing the IPO procedure, through a direct listing. Unlike an IPO, in this case the company does not issue new securities; existing shares of investors and employees are sold on the exchange. This allows you to reduce the cost of investment banking services.
Tokenization of assets
Tokenization is the creation of tokens, the value of which corresponds to the value of the specific asset underlying them. The token is registered on the blockchain. Following this principle, the Currency.com crypto exchange tokenizes Coinbase shares after they are listed on the Nasdaq. Trading in tokenized assets allows you to make money on fluctuations in the quotes of traditional assets.
Tokenized shares meet all legal requirements of the country in which they are issued. At the same time, one does not have to be limited to fiat currencies in order to invest in the change in the price of securities.