Coinbase, one of the most recognized crypto exchanges in the market, could be preparing to go public. What would this entail? Will it convince the SEC?
Changpeng Zhao supports Coinbase’s IPO
Will Coinbase be listed on the stock exchange?
Yesterday, Reuters published a report stating that three people familiar with the issue have said that Coinbase Inc. has begun its plans to go public soon. The news has obviously surprised the entire crypto market.
Coinbase is considered by many crypto users to be one of the flagship companies in the crypto coin and Blockchain technology industry.
And now it seems that preparations for a stock market listing are underway. As expected, the news has raised many questions and conspiracies.
The main one is: What will be the market valuation of the company? To get an idea, we can mention its last Bitcoin Evolution fundraiser, held in 2018, when the company was valued at over $8 billion.
However, we cannot know if the public valuation of the crypto exchange will be above or below that amount but it gives us an approximation.
The stock market launch could occur any time in 2020, sources told Reuters. However, beware, this will not happen until the crypto exchange receives approval from the U.S. Securities and Exchange Commission (SEC).
In fact, anonymous sources have assured the media that Coinbase has not yet registered its plan with the regulator. However, the firm has apparently entered into discussions with investment banks and law firms with the aim of drawing up a plan.
Still, if approved by the SEC, it would represent a victory for the entire crypto community.
JPMorgan accepts Coinbase and Gemini as clients
There’s nothing traditional about
One very important piece of information that anonymous sources made clear to Reuters is that Coinbase’s plan is not a traditional IPO. In this sense, the strategy consists of a Direct Listing (or Direct Quotation).
An IPO involves the sale of newly issued securities, while a direct listing is more like a secondary sale of existing shares that is designed to provide liquidity to the company.
In the end, they are two different strategies with a similar objective: to bring a private company closer to public investors.
What does this mean for the crypto market?
As mentioned above, the plans are still under construction and therefore subject to change. For the time being, the crypto exchange has not issued any statement or comment.
Not to mention that it does not yet have the approval of the US regulatory body, so there is still some way to go.
However, analysts have already begun to look into the possibilities and believe that going public with Coinbase could be the catalyst required by the crypto market.
This is precisely what Chris Burniske, a partner at Placeholder Capital, said on his Twitter account.