Coinbase IPO

Coinbase today filed its S1 document with the SEC signaling its intention to launch an IPO (Initial Public Offering).

Coinbase is a digital/crypto currency exchange, founded in 2012 and recently transitioned to become a fully remote company with no headquarters building. The company brokers the exchange of cryptocurrencies such as Bitcoin and Ethereum for fiat currencies (such as US dollars or Euros).

Actually it is not really an IPO, it’s a direct listing which means employees and early investors can sell stock but the company is not “Offering” any new stock to the “Public”. It will however be listed on the NASDAQ exchange and its stock will be publicly tradeable.

The S1 document provides an insight into the previously unseen operations and finances of the cryptocurrency exchange.

Looking through the S1 reveals that since inception it has generated $3.4b in revenue, largely from transaction fees. Their customers have during this time traded $456b of crypto-assets on the platform which suggests an average transaction fee of 0.75%.

This is a huge margin compared to other financial exchanges which generate an estimated 0.01% of volume in exchange fees. This margin, together with its vast user base (42 million verified users), scope for future growth and general positive sentiment towards crypto assets, has resulted in an estimated initial market capitalization of around $77b.

How does this financial performance stack up against other companies in the space?

Coinbase is the first crypto exchange to announce an IPO so we can only really compare it against traditional financial exchanges. Here I have used some the Excel Price Feed formulas to build a table in Excel to compare Coinbase against 5 of the biggest publicly quoted exchanges:

Comparison of stock exchange financials (including Coinbase).

Looking at this table we can see that Coinbase, based on its projected valuation, will become the most valuable publicly traded financial exchange in the world. It still has a long way to go to reach the huge revenues of ICE (which owns the NYSE), Nasdaq and CME but it has already ahead of Euronext which owns a bunch of European bourses:

Stock exchange revenues

Perhaps more important that its financial data and future prospects is this quote from the S1:

We have applied to list our Class A common stock on the Nasdaq Global Select Market under the symbol “COIN.”

This in itself will probably add a few billion in market cap


All data and the chart shown is provided by Excel Price Feed Add-in market data formulas (Yahoo Finance data).

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