Coinbase Goes Public

There's a New King in Town

Coinbase will list shares of its stock via the Nasdaq Exchange on April 14 (under the ticker COIN).

This is big news for a number of reasons. But, first, what is Coinbase?

Coinbase is the most widely used cryptocurrency exchange in the United States. It was founded in 2012, shortly after the release of the Bitcoin white paper in 2009. It is a fully regulated and licensed exchange, and it currently operates in 40 U.S. states and territories. It is one of the most easy-to-use exchanges out there and has helped to facilitate the onboarding of millions into the crypto space (Source: Investopedia). I purchased my first fraction of a Bitcoin via Coinbase. In my opinion, it is difficult to talk about Bitcoin having gained traction the way it has without Coinbase. Coinbase has been an essential part of Bitcoin’s growth and adoption.

Now for some lesser known, wilder facts about Coinbase:

• $223 billion worth of crypto assets (11.3% of total crypto market cap) exist on Coinbase’s platform.

• 56 million people use Coinbase. This is greater than the number of users for Cash App, Venmo, Robinhood, or eToro. It is also greater than the number of users for every bank in the U.S. other than J.P. Morgan.

• Coinbase’s market cap is bigger than that of the Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE), and of the Nasdaq itself.

Source:

John Street Capital @JohnStCapital

0/ The @coinbase team announced 1Q21 data including revenue of ~$1.8B, adj EBITDA of $1.1B, NI of $730-$800M, trading volume of $335B & assets on the platform of $223B (11.3% of cryptoasset market) with 56M users Run-rate of $7.2B in revenue / $4.4B in EBITDA / $3.0B of NI.

Perhaps my favorite statistic regarding Coinbase’s market cap is that some are valuing the company at $100 billion, almost as high as Goldman Sachs’ $111 billion valuation. The great irony here, of course, is that, less than one year ago, Goldman Sachs proclaimed that cryptocurrencies are not an asset class, yet they just began offering Bitcoin to their wealthy clients and are now valued at almost the same amount as one of the biggest cryptocurrency exchanges in the world. A great shift is taking place, and I believe we are only in the early stages of it.

With that said, I think Coinbase is being overvalued leading into this IPO. A number of notable investors have said that they will refrain from purchasing shares on April 14, as will I. However, with the lack of a Bitcoin ETF and institutions’ strong desire for Bitcoin exposure in whatever way, shape or form imaginable, I wouldn’t be surprised to see a number of institutions getting in on this IPO.

Coinbase’s going public further legitimizes the cryptocurrency space, and it will likely set in motion a wave of new crypto platform IPOs. This is good news for a number of reasons, but mostly because the more these crypto platforms intertwine with traditional markets, the harder it is for the U.S. government to justify over-regulating the cryptocurrency space.

What Bitcoin Did

In other news regarding big shifts, the What Bitcoin Did podcast, hosted by the affable Peter McCormack, was ranked by Apple Podcasts as the #1 investing podcast in Great Britain this week, surpassing the BBC’s Wake Up to Money and the Financial Times’ Money Clinic with Claer Barrett.

Peter McCormack @PeterMcCormack

Yes, did it! @WhatBitcoinDid is the #1 investing podcast in Great Britain.

This is yet another instance of the changing of the guard. The old institutions are losing prominence and lagging behind, while the new ones are heading to the moon. Surely exciting times, and, like I said, we’re just getting started.

Consider Giving Back

If you have done well in markets lately and have a few dollars to give back, please consider giving to The Healing Center of Bay Ridge, Brooklyn. The Healing Center provides refuge and support for victims of domestic violence and elderly abuse as well as food, clothing, and emergency care items for those in need. My friend Stephanie is the Director of Youth Programs for the organization. NY1 recently covered Stephanie’s efforts here. Stephanie is truly good people and The Healing Center does very important work. The organization’s overhead is minimal and your money will reach the people it is intended to help. Please consider donating.

Best,

Frank

Twitter: @frankcorva

Currently Listening To: The sound of the N Train rolling by outside the window of my apartment

juthica @juthica

coinbase's $223B in assets on platform ranks it in the top 20 banks in the US by assets