Coinbase Aims to go Public

As the price of cryptocurrencies soars among renewed interest in them by investors, the most prominent cryptocurrency exchange has signaled interest in going public.

Coinbase announced that it confidentially filed a draft registration statement on Form S-1 with the Securities and Exchange Commission. Following the SEC review process, the form will go into effect.

The announcement and renewed interest in cryptocurrencies come as more investors look for alternative currencies as the dollar’s value weakens.

Coinbase is based in California and was founded in 2012. Coinbase has grown into the largest digital currency exchange in the U.S and has long been the go-to marketplace to buy and sell cryptocurrencies. The company’s website indicates that it has more than $320 billion in total volume traded.

Coinbase was last valued at $8 billion in a funding round conducted in 2018 when it raised $300 million. The company may be worth more now due mainly to the surge in crypto prices and the frenzy for tech stocks.

The IPO announcement did not provide details about how the company would structure its public offering. In a recent interview, Coinbase co-founder Fred Ehrsam told Fortune that the company is “spiritually” built to go public via an offering involving digital tokens on a blockchain, the technology that underpins Bitcoin.

It is unclear if the SEC would agree to sign off on an arrangement that Ehrsam described. If the agency refuses to do so, the company can pursue a direct listing in which it sells shares directly to the public.

The company has not yet released a statement about the nature of the listing. 

Bitcoin has seen skyrocketing prices in the last few months. The cryptocurrency recently surpassed the symbolic $20,000-a-coin milestone and is currently trading at around $23,000. This puts the currency up more than 200% for the year.

The rise in prominence for Bitcoin has been aided by major investors such as Paul Tudor Jones and Stanley Druckenmiller. The rise has also been helped by large financial companies like PayPal and Fidelity, who have made moves in the cryptocurrency space.

Brian Armstrong, CEO, and co-founder of Coinbase, cautioned investors about the cryptocurrency market’s current state.  

“While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk,” said Armstrong. 

The company takes a long-term view of the cryptocurrency market. While Coinbase is happy about Bitcoin’s surging price, it still sought to remind investors of the risks associated with the volatile asset.

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