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It is expected that major U.S. crypto exchange Coinbase may go for an IPO in early 2021.
The US leading crypto exchange Coinbase has reportedly started to prepare for an IPO. According to Reuters, the listing will need the U.S. Securities and Exchange Commission’s (SEC) approval. If blessed, Coinbase can become the first major US digital exchange that offers its stocks via an IPO.
Coinbase declined to comment on the news, and those who provided some data have preferred to stay anonymous. As the sources have revealed, the listing could come this year or at the beginning of 2021. Besides, there are rumors about Coinbase’s intention to go public via a direct listing instead of a traditional initial public offering. Compared with an IPO, a direct listing allows a company to trade publicly without formally pricing its equity through a bloc sale. Existing investors have no lock-up restrictions on when they can divest their holdings following the market debut, which made direct listings more popular lately.
We’ll get to see whether Coinbase direct lists or takes on a traditional IPO in its S-1 filing. The document will describe the company’s historical financial performance and allow us to see how Coinbase fared during various crypto-booms and busts.
It is also known that Coinbase has not yet registered its plan to go public with the SEC, but has been in talks with investment banks and law firms.
At the latest private fundraising round that took place in 2018, the valuation of Coinbase was over $8 billion.
Previous Rumours about Coinbase IPO
It is not the first time the crypto community is discussing the possibility of Coinbase going public. Back in October 2018, Ran Neuner, the host of CNBC show ‘CryptoTrader’, voiced an idea that the exchange would go for an Initial Public Offering.
Former Coinbase President Asiff Hirji said that public listing could be the company’s goal. But before an IPO, Coinbase had a lot to do. In May, Coinbase started collaborating with JPMorgan. Some even suggested that JPMorgan could benefit from a future Coinbase IPO.
JPMorgan banker said:
“There is little business in fees associated with processing wire and ACH payments, I would expect that there are other associated benefits to JPM from any associated banking services, additional collaboration with both of those firms, potential for winning any future IPO or another angle such as JPM coin being offered on either of those platforms.”
Another company to get ready for an IPO is crypto lender BlockFi. According to its CEO Zac Prince, BlockFi could go public as early as the second half of 2021. Now, BlockFi is looking for an experienced CFO with a background in financial markets and the public markets.