Coinbase, the largest cryptocurrency exchange in the U.S., has filed its confidential S-1 form with the SEC to go public, the company said in a blog post on Thursday. The S-1 is “expected to become effective” after the SEC completes its review, the company said.
The timing of the filing is no accident.
Bitcoin (BTC) surged past the $20,000 mark on Wednesday to a new all-time-high and has continued to climb, reaching close to $24,000. The largest cryptocurrency by market cap is up 220% in 2020, driven by a combination of institutional investment and public buy-in from consumer-facing payments companies like PayPal and Square.
Coinbase caters to the retail side with its main exchange, and allows for more advanced trading (like limit orders) on its Coinbase Pro product. It currently supports more than 40 cryptocurrencies in the U.S.
The company launched in 2012, cofounded by Brian Armstrong and Fred Ehrsam, and was most recently valued at $8 billion. In July, the company said it has 35 million users in 100 countries. It has been called the Goldman Sachs of cryptocurrency—in part because of its high trading fees. The company is profitable—a rarity among recent tech unicorn listings—and has been for the past three years.
Coinbase has become the go-to household name site for retail investors looking to buy cryptocurrency for the first time—if they have heard of any exchange at all. There are other exchanges in the U.S. (Gemini, Kraken), and globally (Binance, Huobi, OkCoin), but arguably none has the brand recognition that Coinbase has built.
The Coinbase IPO would mark the first U.S. cryptocurrency company to go public, a major milestone for the maturity of the industry, and could be one of the hottest tech IPOs of 2021.
The company has also been at the center of multiple controversies in 2020.
In September, CEO Brian Armstrong issued a public memo declaring that he wants Coinbase to be an apolitical company where employees don’t discuss politics or social issues. The memo was reportedly a follow-up to an internal conflict that arose after Armstrong was unprepared, at an internal town hall, to answer a question about his stance on the Black Lives Matter movement. His memo was criticized by many inside and outside of tech, though found some supporters among venture capitalists.
Last month, following the fallout of the Coinbase Memo, the New York Times reported on a handful of Black former employees who allege discriminatory treatment by the company. Coinbase put out a memo before the Times story was published in an attempt to get ahead of the story.
It’s unclear whether these issues have hurt the company at all.
“Coinbase was the first mover, and they've got such a moat, and they really have branded themselves as the mainstream place to go,” Jeff Roberts, author of a new book about Coinbase, “Kings of Crypto,” said on Yahoo Finance Live this week. “I know a lot of the crypto purists have objections with them, but as you said, the reality is, if anyone's going to buy crypto, the only company they've heard of is Coinbase. And that's been a huge benefit to them. For the more ideological people, they have other options. But for the average person who wants to buy a little bit of bitcoin, almost invariably, Coinbase is where they're going.”
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Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers bitcoin and blockchain. Follow him on Twitter at @readDanwrite.
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Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers bitcoin and blockchain. Follow him on Twitter at @readDanwrite.
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