Coinbase IPO: 5 Things to Know About the US Cryptocurrency Exchange

Here’s what you need to know about the popular trading platform before the public offering.

What is Coinbase?

The Silicon Valley crypto exchange was co-founded in 2012 by Brian Armstrong, 38, who manages the platform’s CEO. Fred Ehrsam, a director of Coinbase, also helped create the company.

There are two classes of Coinbase stocks. Armstrong owns 11% of the A shares and 22% of the B shares, while Ehrsam owns 11.4% of the A-class and 9% of the B shares.

According to Forbes, Armstrong’s network value is currently $ 6.5 billion based on its ownership in the company, which is likely to increase if the direct listing is successful.

Coinbase counts itself as a bet on the fast-growing crypto-economy, which starts with the number 1 crypto-asset bitcoin, but goes beyond that, Armstrong and the company argue.

Bitcoin prices BTCUSD,
-3.92%
has attracted attention as it has pushed record recurrence, and recently hit a high of more than $ 58,000 this past weekend before giving up some gains in recent trades.

Last week, bitcoin reached a market value of $ 1 trillion, and although the asset created by a person or persons known as Satoshi Nakamoto represents about 70% of the total crypto market, there are still a number of other popular cryptocurrencies traded on Coinbase, including ether ETHUSD,
-3.57%
on Ethereum’s blockchain, Bitcoin Cash BCHUSD,
-5.61%
and Litecoin LTCUSD,
-7.27%,
to name a few.

Who still owns Coinbase?

The venture capital firm Andreessen Horowitz is the largest owner of Coinbase, with approximately 25% of Class A shares and 14% of Class B. And Marc Andreessen, head of venture capital equipment, sits on Coinbase’s board.

Coinbase has an ambition that reflects the Robinhood Markets

“Coinbase is an enterprise with an ambitious vision: to create more economic freedom for every person and business,” Armstrong wrote in a letter updated with the SEC.

Biggest risk factor

The biggest risk factor in Coinbase is undoubtedly that it is a bet on an unproven asset class created just over a decade ago. Coinbase seeks to make it clear that its fate is related to the prospects for Bitcoin and Ethereum and the thousands of other alternative currencies that have already been written.

But a decline in interest and strict regulations in the US and elsewhere could overturn the exchange platform.

Here is now Coinbase explains it:

‘There is no assurance that any supported crypto-asset will maintain its value or that there will be significant levels of trading activity. In the event that the price of crypto-assets or the demand for crypto-assets falls, our business, operating results and financial condition will be adversely affected. The majority of our net income is from transactions in Bitcoin and ethereum. If the demand for these crypto-assets decreases and is not replaced by the new demand for crypto-assets, our business, operating results and financial condition may be adversely affected., ”Coinbase writes in its S-1 submission.

How big is Coinbase?

According to the data website CoinMarketCap.com, the crypto exchange platform is number 3 among the largest digital asset exchanges in the world. The position places it behind Binance, based in Seattle and Huobi Global, a cryptocurrency exchange on Seychelles established in China.

In the US, Coinbase is by far the most well-known crypto platform, but there are competitors, including Gemini, run by Tyler and Cameron Winklevoss, who famously run their Facebook Inc. FB used it,
-3.64%
settlements to invest in bitcoins.

Kraken is another popular crypto platform and direct competitor in the US

Odds & Ends

In public offering, the company paid a number of tributes to the founder or founder of bitcoin and the era of digital currencies.

For example, it listed the genesis block associated with Satoshi Nakamoto on ‘1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa’, the white paper of which launched bitcoin in 2008. (In addition, a “Satoshi” is the smallest unit bitcoin – 0.00000001 BTC).

The company does not provide a physical address for its California headquarters, citing the COVID-19 pandemic, which has forced a number of companies to make most, if not all, staff members work remotely. For this reason, Coinbase refers to itself as a first-rate remote company. ‘

Having no address for some is considered in line with the decentralized nature of blockchain and bitcoins.

The company also provided a handy foundation for cryptocurrency terms, including the definition of terms such as “hodl”, which became popular in cryptocurrencies. Hodl was accidentally created in a Reddit in 2013 and means a long-term holder of an investment.

Read: Do not fight with the FUD: HODL against this list of bitcoin terms you need in your vocabulary

Armstrong crypto charity

Back in 2018, Armstrong kicked off GiveCrypto.org, which does direct cash transfers to people living in poverty.

‘People who invested in crypto early on have amassed an enormous amount of wealth in a relatively short period of time. Yet the reputation of the crypto community has been dominated by images of ‘brittle in Lambos’ whose antics get a lot of attention,’ Armstrong wrote in a separate blog post on Medium in 2018.

Armstrong reportedly donated at least $ 1 million to GiveCrypto.