Coinbase postpones its $68 billion IPO until April
The US exchange is one of the first crypto companies to go public in the US. But plans are being pushed back.
US crypto exchange Coinbase has postponed its direct IPO until April, sources cited by business magazine Bloomberg said on Friday.
The exchange is valued by some analysts at more than $68 billion, with some crypto advocates even believing the true valuation is more than $100 billion. It is Bitcoin Revolution considered by some to be one of the most prestigious firms in the crypto space – given its regulatory status and reach in the country.
According to its filing last month, Coinbase says the stock traded into the private market at an average price of $343 in the first quarter of 2021 through March 15. That’s a nearly 10-fold increase since the third quarter of last year: according to Coinbase, the stock traded at an average price of $28 per share in the period to 30 September, giving it a valuation of $5.3 billion.
The $68 billion valuation is larger than New York Stock Exchange parent Intercontinental Exchange Inc (ICE), Nasdaq Inc and the London Stock Exchange, according to the report – but $4 billion less than futures exchange operator Chicago Mercantile Exchange (CME) Group.
It’s not a tame valuation, either. Coinbase trades at 53 times its 2020 revenue. ICE, on the other hand, trades at a price-to-sales ratio of 10.67.
The jump is in line with the rise of Bitcoin (go to Buy Bitcoin at eToro guide) and other cryptocurrencies in recent months. Data from market tool Coingecko shows that the entire crypto market was valued at under $600 million in the middle of last year, but has reached a valuation of over $1.8 trillion at the time of writing.
Bitcoin dominates the market with a valuation of just over $1.1 trillion.
How did it come to this?
Coinbase was founded in 2012 by Brian Amstrong and is one of the earliest crypto companies. It raised millions of dollars from established venture funds such as Andreessen Horowitz, Tiger Global and Y Combinator in the years that followed.
It first floated plans for an initial public offering in spring 2020 and announced its direct listing earlier this year. The latter means that shares in the company would be offered directly to the public through a traditional stock exchange, as opposed to the traditional IPO route where new shares are created, underwritten and sold to the public.
Meanwhile, given the regulatory landscape and public acceptance of cryptocurrencies, listing would be a historic step.
And for some, it is an indirect recognition of the many cryptocurrencies traded on Coinbase’s platform.