By
Steve Muchoki
April 25th, 2024
Given the explosion of the cryptosphere, Coinbase’s valuations have soared by 500% during the last eight months.
Coinbase – one of the biggest cryptocurrency exchanges of the United States with over 14 million registered users has revalued itself at $8 Billion after its recent acquisition of Earn.com that allegedly has been done for a price of $120 million. As first reported by Recode, soon after the acquisition, which involved an offer of equity package, the valuations of the exchange operator have soared to $8 billion.
When pitching the equity package to Earn.com, Coinbase offered its stock at an approximate price, but sources familiar with the matter told that Earn’s investors settled the deal for being paid in cash while some of the members from the Earn’s management team (including former Earn CEO (now Coinbase CTO) Balaji Srinivasan) preferred to take their payments in stock options.
The actual valuation of the company can only be confirmed after the exchange operator completes the formal process of 409a valuation which is a formal report detailing the value of a company’s common stock. However, preferred stock is something that the big institutional investors buy and it usually highlights the valuations of a company. In the past few weeks, some internal sources have said that brokers have been approaching these big investors to buy existing shares at a valuation ranging from about $4.5 billion to $6 billion.
Back in August 2017, Coinbase was valued at $1.6 billion having completed the Series D funding round led by IVP. The company’s fortunes clicked in the last quarter of 2017, when the overall crypto markets exploded to over $750 billion valuations, and Bitcoin surged to its all-time high of $20000. With the booming crypto market and the craze surrounding it, Coinbase managed to fetch $1 billion in revenues.
Coinbase has earned the reputation of a go-to-exchange to trade cryptocurrencies because of its user-friendly policies. The exchange is currently said to be in talks with regulatory bodies to get itself registered as a licensed brokerage firm.
In the past few months, the exchange is seen making some important acquisitions in a bid to expand its products and services to establish a larger reach and a strong foothold in the crypto markets. In addition to the major acquisition of Earn.com, the company also acquired Ethereum Wallet Startup ‘cipher Browser’ which is a popular Web 3 decentralized app (Dapp) browser further highlighting its intention to merge Dapp’s features with the exchange’s own decentralized browser ‘Toshi’.
In addition, the company has recently brought some new options to its platform. In February this year, the company launched a Coinbase Commerce button making it absolutely easy for merchants to receive payments, while back in March, Coinbase launched a new Crypto Index Fund, which will highlight all the major trends and shifts in the digital currency market. Last month was marked with the exchange’s announcement of Coinbase Ventures‘ launch -an early-stage venture capital fund for the financing of companies working in the blockchain and cryptocurrency space.