On April 14th Coinbase will offer 114.9 million shares of stock in a direct listing on the Nasdaq exchange. The company marks the first cryptocurrency exchange to go public in the United States and paves the way for others to follow suit. 

Fast Facts:

  • The SEC has approved Coinbase's direct listing for April 14th.
  • Coinbase will offer 114.9 million shares of stock under the ticker "COIN."
  • Coinbase released impressive Q1 earnings results on Tuesday, giving its IPO an even stronger outlook.
  • The IPO marks the first US cryptocurrency exchange to be publicly listed, potentially paving the way for other crypto-related businesses. 

What Does Coinbase Do? 

Coinbase is a regulated cryptocurrency exchange in the United States. The company facilitates the buying and selling of Bitcoin along with numerous other cryptocurrencies. Coinbase serves as an easy-to-use on-ramp to the cryptocurrency markets for users looking to buy, sell and hold crypto. 

How Does Coinbase Make Money?

Coinbase Makes money by charging its users to buy and sell cryptocurrency. Every time a user buys, sells or sends their cryptocurrency, they pay a fee. This is essentially a commission on transactions done on the platform. Coinbase also makes money on margin fees, custodial services and its crypto rewards credit card. 

Coinbase Q1 Earnings

On Tuesday, Coinbase released its Q1 Earnings results that boasted highly impressive numbers. The US crypto giant's announcement showed off 56 million verified users, total revenue of $1.8 billion and a net income of approximately $730 million to $800 million.

Coinbase's first-quarter performance had revenues larger than the last two years combined, making its IPO outlook on the 14th even more promising. 

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Members of the crypto industry had a lot to say on Coinbase's impressive numbers, showing that Coinbase's upcoming IPO has a very positive sentiment.

"Coinbase is pretty much a better company than every financial services incumbent (growth, margins, prospects, etc.) This makes me happy," said CEO and founder of the Digital Currency Group, Barry Silbert, via a tweet

Frequent television crypto pundit and co-founder of Morgan Creek Digital Assets, Anthony Pompliano, said "Coinbase just reported 56 million users, $335 billion in trading volume, and $1.8 billion in revenue for Q1. What an absolute beast of a company."

How Much Will a Share of Coinbase Cost?

An IPO’s value depends on the level of demand, how it compares to others in its industry who have already gone public, its growth prospects and the narrative and story surrounding the company.

In this case, Coinbase has a unique situation. It is the first crypto exchange in the United States to go public. After its Q1 earnings report, the narrative around Coinbase is of meteoric performance numbers that have now dwarfed many of its previous years combined. 

This all makes for what could potentially be a strong entry on to the public markets for Coinbase. A single shares value can be influenced by a number of factors including the company's initial secondary market trading prices.

Secondary markets are markets for private equity where employees and executives of private companies have the ability to buy and sell their stock. This allows them to get immediate access to money prior to the public IPO.

In these secondary markets, COIN has been trading at an average price of just over $343, valuing the company at over $67 billion. 

While the IPO looks promising given the company's Q1 earnings and secondary markets price action, Coinbase still has a lot to prove as the first US crypto exchange to go public. 

Things to Consider When Buying Coinbase Stock

Coinbase's performance could largely rely on the performance of Bitcoin and other leading cryptocurrencies. The purchase of Coinbase stock represents a faith in the future of cryptocurrency and that Coinbase is in a solid position to capitalize on its success. Before buying Coinbase, it can be healthy to evaluate your belief in the future of cryptocurrency.

Where to Buy Coinbase

On the 14th, retail investors will be able to invest or trade Coinbase shares under the ticker "COIN" during regular market hours. Those interested will be able to find the stock on their brokerage accounts. Depending on the brokerage platform, some people may be able to start buying during pre-market hours from 4 a.m. to 9:30 a.m. EST. 

What The IPO Means For The Crypto Industry

Coinbase's IPO marks a step into further legitimacy for an industry that had previously been labeled as an unregulated and sometimes fraudulent space. Coinbase's listing on a public marketplace for both retail and institutional players to take part in helps to pave a road for others to follow.

Other larger exchanges in the US like Kraken and Gemini now have an example to follow. The more these businesses grow the more they become pillars of the cryptocurrency infrastructure and industry, helping to validate the existence and use of cryptocurrency further.