Coinbase IPO | Is Coinbase Worth Investing In?

Coinbase IPO 2021: Everything You Need To Know

4 Min Read |  April 14, 2021

null

Amid the ongoing Bitcoin boom, the leading cryptocurrency brokerage of the USA, Coinbase revealed its plan to go public. 

But, there is a catch! 

The latest buzz from Wall Street reveals that it will go public but through the process of direct listing. 

Since the news has spread on Wall Street, the hush-hush has begun about its upcoming direct listing. In fact, if the speculations are to be believed, it could be one of the biggest direct listings to take place on Nasdaq.

What is Coinbase? 

The increasing popularity of digital currencies like Bitcoin or Litecoin definitely must have turned your eyes! 

What if you decide to buy any of the cryptocurrencies? 

How will you proceed? 

Well, you can opt for the traditional method of buying cryptocurrencies known as 'mining'. But, do remember the process of mining can be highly technical, costly and tough for people with basic knowledge of crypto. 

So, is there an easy way for this? 

Yes, there is! 

You can easily buy a number of cryptocurrencies through cryptocurrency exchanges like Coinbase. 

To find out more about Coinbase, please continue with the reading! 

One of the mainstream cryptocurrency exchanges in the United States, Coinbase was founded only nine years ago in 2012. It was founded by Brian Armstrong (who is an ex-engineer of Airbnb) and Fred Ehrsam (ex-trader at Goldsachs). The sole focus to start the company was to make cryptocurrency investing more accessible and efficient for the general public. 

Since its inception, the company has taken around 43 million retail users onboard and more than 7,000 institutional clients present in around 100 countries. 

Despite being a pretty young company, it has succeeded to create a standard platform for investors looking out to explore the route of investing in cryptocurrency. With its wide range of products, the company tries to give a safe and amicable experience of cryptocurrency trading to its customers. Coinbase is not only regulated but it is a licensed platform that can be accessed by all the states present in the United States of America.

The range of products include -

  • Investing in cryptocurrency

  • Trading platform 

  • The custodial accounts for institutions

  • Coinbase wallet available for the retail investors

The acceptance of cryptocurrencies by the masses has always been hazy but even after all that, Coinbase has expanded rapidly. Initially, it only allowed Bitcoin trading on its platform but with the passage of time it went on to add other cryptocurrencies such as Ethereum, Litecoin, XRP, etc. 

Fees Structure Offered  By Coinbase

Now, before you decide to get on with cryptocurrency trading using the Coinbase platform, it is important to acquaint yourself with the basic fees it charges. The basic version of the platform is on the expensive side whereas Coinbase Pro (an advanced version of Coinbase that offers simpler crypto investment) is comparatively cheaper

Although the company has set varied fees structure for different nations, the following table mentions the basic fees structure applicable in the United States: 

*Source - Investopedia

Apart from the basic fees mentioned in the table above, you will also be charged each time you carry out trading in cryptocurrencies. 

Coinbase Review 

As an investor before you make the final decision to put in your hard-earned money in an IPO, it is better to weigh the pros and cons of the services offered by the concerned company. 

Here are the advantages and disadvantages of the Coinbase platform - 

Advantages: 

A Simplified User Interface-

There is certainly a major reason behind the fact that Coinbase has gained the position of leading crypto investing platform in the United States and that is its simple user interface. Cryptocurrency can be a new field for many investors out there and investing in it could seem like a task. With Coinbase it becomes relatively easy because it offers a learning program on how cryptocurrencies work, as well. 

A Wide Range Of Cryptocurrencies Available- 

Although Coinbase started low initially as it only offered buying or selling of Bitcoin, it soon increases its bandwidth in this regard. Currently, it offers more than 25 cryptocurrencies for trading as well as investing. So, choose your pick and start your crypto investment right away! 

It Comes With A Good Liquidity- 

Be it the stock market or even the crypto industry, these are subject to the volatility taking place in the market. Just Imagine if the issue of liquidity also adds to it, it would put the investors in a difficult position, right? With Coinbase you can shed the worry of liquidity as it is one of the most liquid cryptocurrency exchanges. 

Disadvantages

The Fees Is High-

Remember this, unless you have opted for the Pro version of Coinbase, the fees charged by it is higher as compared to other players in the market. The solution to this is switching to Coinbase Pro that has more features to offer (like -Address Book, Crypto Address Whitelisting)  and the fees charged are also lesser. 

You Have No Control Over Your Own Wallet-

Although Coinbase is a licensed platform it does not provide you with the liberty of having control over your own wallet. For those who are unaware, whenever you buy cryptocurrency through an exchange, it gets stored in an e-wallet. Unfortunately, the control of that wallet lies with Coinbase and you are not an autonomous owner of the wallet. 

Coinbase IPO: Details You Need To Know

Not many people are aware of the fact that Coinbase’s shares are already being traded on the Nasdaq Private Market. However, after filing a paper for a direct listing on February 25, 2021, it will say hello to the trading world on April 14, 2021. The Coinbase stock symbol will be ‘COIN’. 

The IPO prospectus filed by the company makes a mention of its bold aim to revamp the financial system around the globe. If all goes well and as per the plans of its co-founders, it could become the first big direct listing to happen on the Nasdaq. Further, if some reports are to be believed then according to the recent transactions taking place in the Nasdaq Private Market, the valuation of the company is around $100 billion. 

Important Takeaways

  • Coinbase has been witnessing an impressive trading volume over the years. For instance, in 2019 the trading volume stood at $21 Billion then in 2020 it surged up to $38 billion. 

  • As of December 31, 2020, the average monthly transactions made by the users on the Coinbase platform stood at 2.8 million. 

  • The lifetime trading volume of Coinbase is that of $456 million and it is known to facilitate both retail investors as well as institutional players. 

  • Lastly, one of the most striking features of Coinbase that makes it a popular choice is its top-notch regulatory compliance and regulatory compliance. 

Key Financial Highlights

The company has been projecting quite impressive financials owing to the cryptocurrency boom in the past few years. Following are some graphs that will help you to trace its financial performance in a better way. 


  1. Surging Trading Volumes 


  1. Growth In Revenue 

  1. Subscription Revenue 


  1. Trading Volume Mix Of Various Cryptocurrencies


Should You Invest In Coinbase IPO? 

A company that started with just 13,000 users back in 2012, now has millions of subscribers on board and this fact speaks volumes about the growth trajectory of Coinbase

But, are these numbers impressive enough to lure investors? 

Or, is the surge in the trading volume of Coinbase a temporary thing? 

Should you invest in Coinbase? 

To say the least, the ongoing cryptocurrency boom might not be permanent and this would make Coinbase a volatile stock. 

So, if you go ahead with making your bet in Coinbase IPO, be prepared to have a ride full of ups and downs due to the volatile market of cryptocurrencies. 

Keep Investing!


Whatsapp Icon

Why you should subscribe to daily WhatsApp Newsletter ?