Topline
Coinbase, the largest cryptocurrency exchange in the United States, filed new documents on Wednesday morning ahead of its direct public listing on the Nasdaq, giving investors a closer look at a company at the forefront of the surging cryptocurrency industry as prices soar and institutional investors pile in.
Coinbase co-founder and CEO Brian Armstrong on May 15, 2019 in New York City.
Key Facts
Coinbase raked in a staggering $1.27 billion in total revenue ($1.14 billion in net revenue) in 2020, more than double its $483 million net revenue the previous year, with a net margin of 25%.
The exchange pulled in $585 million in total revenue in the fourth quarter of 2020 alone, in line with Forbes’ reporting last month.
The exchange said the majority of its net revenue comes from transactions in bitcoin and ether, the two largest cryptocurrencies by market capitalization, which accounted for more than 56% of total trading volume on the platform in 2020.
All in, Coinbase saw profits of $322 million in 2020 after a loss of $30 million in 2019.
The company said it has 43 million verified retail users on its platform, 2.8 million of which make monthly transactions, along with 7,000 institutions.
Surprising Fact
Coinbase co-founder and CEO Brian Armstrong took home $59.5 million in total compensation last year—more than JPMorgan CEO Jamie Dimon and Goldman Sachs CEO David Solomon.
Crucial Quote
“It’s the first legitimate IPO from the entire blockchain sector,” Olaf Carlson-Wee, CEO of crypto investment firm Polychain Capital and Coinbase’s first employee, told Forbes last month.
Key Background
Coinbase’s filing comes amid a surge of institutional interest in cryptocurrency. Tesla announced earlier this month that it had poured $1.5 billion into bitcoin and plans to start accepting bitcoin as payments, and business analytics company MicroStrategy said Wednesday that it had spent more than $1 billion buying bitcoin. Fintech company Square, helmed by Twitter CEO Jack Dorsey, also revealed a new investment in the most popular cryptocurrency this week. Other recent institutional entries into the space include BNY Mellon, which announced this month that it will process cryptocurrencies for its wealth management clients, and MasterCard, which will begin supporting some cryptocurrencies on its networks.
What To Watch For
Coinbase is planning to become a public company through a direct listing rather than a traditional initial public offering (IPO)—an increasingly popular option for tech companies wary that the IPO boom might dilute the value of their shares. Spotify, Slack and Asana went public using a direct listing, and Roblox plans to do the same.
Further Reading
Coinbase Investors Say It Could Hit $100 Billion Valuation When It Goes Public (Forbes)
Tesla Has Plunged 25% And Lost $200 Billion In Market Value Since Its Bitcoin Investment (Forbes)
Fed Chair Powell Says Digital Dollar Is A ‘High Priority Project’ (Forbes)
$8.7 Trillion Asset Manager BlackRock Is Exploring Bitcoin As Institutions Flood Crypto (Forbes)
