By Qin Xiaofeng, Edited by Hao Fangzhou
Originally published on Odaily Planet Daily
On February 25, Coinbase, the largest compliant cryptocurrency exchange in the U.S., officially filed an S-1 registration form with the U.S. Securities and Exchange Commission (SEC), planning a direct listing of its Class A common stock on Nasdaq under the ticker symbol COIN.
Key Highlights from Coinbase’s S-1 Filing
Revenue & Profit: Since its founding in 2012, Coinbase has generated over $3.4 billion in cumulative revenue, predominantly from trading commissions (96% of net income).
2020 Performance:
- Revenue: $1.3 billion (140% growth YoY).
- Net Profit: $322.3 million (960% growth YoY).
User Base:
- 43 million registered retail users.
- 7,000 institutional clients.
- 2.8 million monthly active traders.
Valuation:
- Recent secondary market price: $373 per share**, implying a **$100.3 billion valuation.
- Equivalent to 3M Company’s market cap (ranked #99 on U.S. stock markets).
Deep Dive: Coinbase’s Business Model
1. Financial Metrics
- Total Assets: $5.855 billion (including $1.062 billion in cash).
Crypto Holdings:
- $187.9 million in BTC, ETH, and other cryptocurrencies (201% ROI).
- $48.9 million in USDC.
2. Shifting User Dynamics
Institutional Surge:
- Institutional clients grew from 1,000 in 2017 to 7,000 in 2020.
- Their trading volume share rose from 20% (2018) to 64% (2020).
Retail Decline:
- Retail contribution dropped from 80% (2018) to 36% (2020).
3. Risks & Challenges
- Regulatory Hurdles: Compliance limits derivatives trading (unlike Binance, Huobi, OKEx).
- DeFi Competition: Rising competition from decentralized platforms.
- Market Volatility: Revenue heavily tied to crypto price swings.
Why Coinbase’s IPO Matters
1. For Coinbase
- Funding Access: Opens doors to traditional capital markets.
- Liquidity: Early investors and employees can cash out (no lock-up period).
2. For Traditional Finance
- Blue-Chip Crypto Exposure: A profitable, regulated gateway for institutional investors.
3. For the Crypto Industry
- Legitimacy Boost: SEC approval signals broader acceptance.
- Regulatory Blueprint: Sets a precedent for future crypto IPOs.
Who’s Next to Go Public?
Contenders:
- Gemini & Kraken: U.S.-based, SEC-compliant, no platform tokens.
Non-Starters:
- Binance: CZ has dismissed IPO plans.
- Huobi/OKEx: Already linked to HK-listed firms; platform tokens complicate SEC approval.
- Bithumb: Repeatedly blocked in South Korea due to tax policy shifts.
FAQ
Q: How does Coinbase make money?
A: 96% of revenue comes from trading fees, with institutional clients driving recent growth.
Q: Why is Coinbase’s IPO significant?
A: It’s the first major crypto exchange to list, bridging crypto and traditional markets.
Q: Will other exchanges follow Coinbase?
A: Likely, but only fully compliant U.S. platforms like Gemini/Kraken stand a chance.
👉 Explore crypto’s next big IPO candidates