Bitcoin Exchange Coinbase to Go Public; What does it mean for BTC / USD?
It’s official. Coinbase, the Bitcoin exchange, will become a publicly traded company.
The U.S. Securities and Exchange Commission (SEC) released Coinbase’s S-1 filing on Thursday, indicating that it has approved the cryptocurrency trading company’s request to list its shares on Nasdaq seven months after your initial presentation. That made it the first exclusive crypto exchange to achieve mettle.
Rumors that Coinbase was exploring a public listing opportunity surfaced last summer. The company confirmed the news in December 2020, revealing that it had filed an S-1 application with the SEC. Last month, Coinbase announced that it was going to list its Class A shares directly.
Meanwhile, Coinbase’s S-1 filing release also revealed its financial performance for the first time in public. It showed that the exchange made $ 3.4 billion in total revenue through 2020, with transaction revenue contributing 96 percent of overall returns.
The firm also showed that it made a net profit of $ 322.3 million in 2020. However, in 2019, it suffered losses of $ 30.4 million.
“We,” Coinbase explained, “expect our operating expenses to increase significantly for the foreseeable future and we may not be able to consistently achieve profitability or positive cash flow from operations, which may cause our business, some operating and financial results condition to be adversely affected “.
Coinbase did not share a market price for its public market debut. However, its shares sold through Nasdaq Private Markets were valued at $ 373. That has the American firm with a valuation of roughly $ 100 billion.
Institutional exposure without having to hold Bitcoin
Coinbase’s intentions to go public have opened a portal for institutional investors to gain exposure in the cryptocurrency market without having to buy cryptocurrencies.
Speculators will be able to buy or sell Coinbase shares on the stock market like any other publicly traded company. The success of your trade would depend on how the exchange works as a business. Therefore, a growth in the cryptocurrency sector, driven by higher valuations in Bitcoin, Ethereum and other token markets, would determine Coinbase’s stock market bias.
Chris McAlary, CEO of bitcoin ATM operator CoinCloud, noted:
“If traditional investors feel more comfortable investing in stocks and putting their money in a company with cash flow, a board of directors and all the traditional infrastructure, they will appreciate the opportunity to avoid the volatility of cryptocurrencies and invest in Coinbase stocks.” .
What does it mean for BTC / USD?
When the SEC finds a suitable company for the public, the regulator signifies or signals that there will be greater demand for its products and services in the future. Cryptocurrencies are at the core of Coinbase’s services, which means that their public listing is based on a boom in major digital assets, including Bitcoin and Ethereum.
Most importantly, the Coinbase presentation comes at a time when companies and traditional investment vehicles have exposed their treasures / wallets to Bitcoin. His moves took cues from the cryptocurrency’s potential to act as a hedge against future inflation caused by the ultra-moderate stimulus policies of the Federal Reserve and the US government.
Bitcoin rose more than 1,200 percent from its mid-March low of $ 3,858 amid lower interest rates, endless bond purchases and trillions of dollars in direct aid to Americans, taking advantage of stressed bond yields and a depressed US dollar.
And now, with the IPO of a major Bitcoin exchange, the cryptocurrency hopes to gain more traction from retail and institutional traders alike.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.