Coinbase Global Inc. filed for an initial public offering on Thursday with the Securities and Exchange Commission, becoming the most prominent cryptocurrency-focused company yet to tap the public markets.
Coinbase has emerged as one of the most recognizable names in the crypto industry, with more than 43 million verified users, and about 2.8 million that use the company’s trading platform monthly.
The filing reveals how much Coinbase’s business is tied to the ebbs and flows of the bitcoin market. Its revenue more than doubled to $1.3 billion in 2020 amid a bitcoin rally, while it posted a profit of $322 million. In 2019, when bitcoin trading was weak, it had a loss of $30 million on $533 million in revenue.
Shares will be listed on the Nasdaq Global Select Market via a direct listing under the ticker symbol COIN.
Direct listings differ from traditional initial public offerings in that companies take their shares to the stock market directly. Companies are able to save money that in a more traditional IPO would be shelled out to investment banks. This option to go public isn’t as common as traditional IPOs.
Coinbase had said in a December blog post that it filed confidentially with the SEC to go public.
Coinbase was founded in Silicon Valley in 2012 by
the current chief executive, and
a former president and current director. It has grown from a startup project to a company with about $90 billion in assets under its custody and customers in more than 100 countries.
Those customers include more than 7,000 institutions, including hedge funds, trading firms, family offices and corporations, the company said.
In a letter included with the prospectus, Mr. Armstrong said Coinbase has an ambitious goal. The existing financial system is weighed down by “high fees, delays, unequal access and barriers to innovation,” he said. Bitcoins and the technology behind it, broadly called blockchain, can “create more economic freedom for every person and business.”
The company is focused on investing for the long term, he said. While it may be profitable at high times, like the current environment where bitcoin is trading at or above $50,000, it will likely lose money during downturns in the crypto markets. “Our goal is to roughly operate the company at break even,” he said.
Bitcoin prices have surged since the beginning of last year when they traded around $7,000. The digital currency peaked above $58,000 on Sunday and traded midday Thursday at $50,825.
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