Coinbase's $100B+ public debut, explained - The Hustle
The Hustle

Coinbase’s $100B+ public debut, explained

Coinbase is about to have a huge $100B+ public listing. Here’s the S-1 breakdown.

Don’t want to buy Bitcoin at $50k? Buy the trading exchange where people go to buy Bitcoin: Coinbase, the largest US cryptocurrency exchange.  

Its $100B+ direct listing will be tech’s biggest public debut since Facebook. 

Here’s everything you need to know:

First, let’s talk crypto and Bitcoin

Coinbase calls today’s financial system an inefficient and costly “patchwork of intermediaries” — banks, brokers, custodians, exchanges, clearinghouses, payment processors, etc. 

The first crypto asset — Bitcoin — agrees with this assessment.

What Google did for knowledge, Bitcoin wants to do for finance. It endeavours to democratize access to a new, digitally native financial system — with just a few taps on a smartphone, anyone should be able to easily and safely send and receive Bitcoin in lieu of traditional money. 

Why? Because cryptocurrencies like Bitcoin act as digital assets whose transactions can be tracked via secure electronic ledgers (i.e. blockchain). 

Bitcoin is a building block for the larger cryptoeconomy AKA a more transparent, efficient, and accessible financial system of the internet age that leverage crypto assets. This is the space in which Coinbase plays. 

The business of Coinbase, explained 

How does someone acquire a cryptocurrency like Bitcoin? There are two main options: via mining, or buying it via an exchange. Given how complex and expensive mining is, exchanges are the way to go for most people (trust us on this one). 

Coinbase provides not just an exchange, but a whole crypto ecosystem to buy, store, and use crypto assets safely and in a user-friendly experience. 

There’s a lot to like about Coinbase

In the US, Coinbase is a go-to starting place for crypto enthusiasts. In fact, $456B of cryptocurrency has been traded via its platform since its inception.

On a company level, Coinbase has plenty of strengths:

On the macro level, there are promising tailwinds

Still, investing in Coinbase is definitely risky

While taking on the dinosaur of the current financial system, the crypto space is still a spring chicken. 

In two years, it went from $8B to $100B in valuation. How? 

In total, Coinbase has raised $540M to date. Its last round in 2018 was valued at ‘just’ $8B. 

So, what happened? 

Starting this January, Coinbase started selling weekly batches of up to 1.8M shares via Nasdaq’s Private Market to test the appetite and price. Each week’s shares went for increasingly more money. Eventually each share went for almost $400 / share, translating to a $100B market cap. 

Timing is TBD. Yet the public debut is expected to happen soon, especially since Coinbase is doing a direct listing

Who’s getting rich(er) in the IPO? 

In 2020, some Coinbase executives made more than Tim Cook, who made ‘only’ $15M. 

Not every exec’s comp is listed in the S-1. Here’s the details of those who were: 

Investors include Andreessen Horowitz, Initialized Capital, Tiger Global, and Y Combinator. 

Closing thoughts — a historic moment for crypto

Beyond being a success for Coinbase, a strong IPO would legitimize crypto in a major way:  

Mind the mining. We’re about to witness history with Coinbase’s IPO.

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