How Bitcoin shaping the success of Coinbase IPO

Spread the love

Coinbase began its journey by helping users to purchase Bitcoin. Fast-forward 8 years and consumers will be able to buy part of the company, with Coinbase’s IPO aiming to do the rounds for a while now.

The company filed an IPO prospectus with the Stock and Exchange Commission on 25 February 2021, reporting that Coinbase has some $130 million worth of bitcoin under its belt. According to Ecoinometrics, with respect to the BTC price as at 31 December 2020, Coinbase keeps about 4,342 BTC. At press time, the same value amounted to about $212 million.

In the light of the upcoming trading plans and the market success of Bitcoin, it is worth looking at whether the long-term growth of Coinbase and Bitcoin is going to go hand-in-hand.

Positioning for Growth and Success through Bitcoin, or not?

Coinbase has long been synonymous with Bitcoin and other cryptocurrency properties. Fundamentally, increase in Bitcoin’s price is projected to have a positive effect on Coinbase as well. However, as the Ecoinometrics article referred to above was swift to point out, the BTC position of the exchange is comparatively lower than that of the other parties on the Bitcoin treasury list.

Although the company could eventually increase its role in Bitcoin, a smaller position makes sense, particularly after the decline of last week.

Take, for example, Microstrategy and its treasury of more than 90,000 BTCs, i.e. 0.4 per cent of the total circulating stock. As Bitcoin plunged in the markets over the past week, MSTR’s shares also collapsed dramatically, dipping almost 50 percent from the peak. MicroStrategy’s strong role in the BTC ended up dictating its stock as well, which is something that Coinbase will want and prevent.

RECOMMENDED READ:  Bitcoin Hesitates But Indicators Suggest BTC Could Surge Above $9,300

Coinbase: Revenue Cycle Structure

As an exchange, Coinbase’s business period clearly doesn’t depend on bitcoin going up. The business collects fees and royalties as people acquire and sell digital properties on the website.

Coinbase charges high margin rates of about 0.50 per cent for crypto-purchases and sales. There is also a premium for Coinbase, which is a commision paid on all crypto transactions, charged in addition to the spread. Coinbase Commerce recently introduced the website, supplying online merchants with tools that enables them to accept digital asset payments. In addition, the exchange has its own USD coin or USDC, which is a stablecoin based on the Ethereum.

Coinbase rang up $1.3 billion in 2020, according to its SEC filing. As a result, once digital assets are important, Coinbase’s companies can also flourish.

The idea of direct listing and Banking on Bitcoin?

When Coinbase opted to opt for a direct listing rather than a subscription to an investment bank, it implicitly shared the narrative of being a ‘people’s exchange,’ while defending its 2013 slogan – Welcome to the Future of Finance.

With a direct listing strategy, Coinbase will welcome greater liquidity while at the same time instilling a degree of openness that would allow the exploration of organic pricing for its stock on the exchange.

RECOMMENDED READ:  Bitcoin and Ethereum Surge to New Highs, Gold Almost at All-Time High

Would Coinbase’s IPO be more successful if Bitcoin’s price rallies take place at the same time? It’s totally. However, the exchange is now becoming a common institution in crypto-space, and this observation means that it already enjoys a degree of trust between its customers, both current and future, regardless of how Bitcoin can do on charts.

Collective development in cryptocurrencies is going to write the success story of Coinbase, but it would really be wrong to say that everything depends on Bitcoin.

 420 Interactions,  4 today

READ ALSO:
Bitcoin Price Movement Analysis for 17th April, 2021

Following reports that Turkey's central bank had placed a ban on crypto-holders using their digital currencies for payment, Bitcoin fell Read more

What is the concept of Crypto Arbitrage? – Earn Money With Cryptocurrency

Where there is a price gap between two or more exchanges, there is an opportunity for cryptocurrency arbitrage. Arbitrage is Read more

Central Bank of Nigeria (CBN) and Nigeria’s SEC iin talks about crypto regulation, 2020 crypto guidelines  suspension unchaged.

The Securities and Exchange Commission (SEC) of Nigeria has reported that discussions with the Central Bank of Nigeria (CBN) about Read more

Bank of Korea’s Governor is the first to criticize the “limitations” of crypto-assets.

In South Korea, there has recently been a large increase in crypto-investments. Unlike in the United States, regulatory authorities in Read more

The Nigerian Securities and Exchange Commission (SEC) claims that the central bank’s crypto ban has caused business disruption.

The Nigerian Securities and Exchange Commission says it is collaborating with the central bank to develop a regulatory system for Read more

Finance authorities dismiss cryptocurrencies, in the wake of Coinbase’s IPO celebrations

Economic gatekeepers are taking a closer look at blockchain as mainstream coverage of the Bitcoin bubble and Coinbase listing intensifies. Read more

Romanian university intends to consider cryptocurrency payments for admissions fees.

The academic college, which has about 11,000 students, stated that the inclusion of crypto payments was part of a campaign Read more

Bitcoin Price Movement Analysis for 11th April, 2021

Is Bitcoin nearing its peak? It's unlikely. Many on-chain measurements revealed that, although Bitcoin was highly bullish, it had not Read more

Fidelity’s Tom Jessop on why Crypto has reached a “tipping point.”

The crypto market has gained traction as a result of low interest rates and fiscal stimulus, according to a Fidelity Read more

How arrests for attempting to obtain a hitman and a nuclear bomb demonstrate that the dark web is not always anonymous.

Paying with cryptocurrency does not guarantee your safety. Most of the criticisms levelled at cryptocurrencies is that its difficult-to-trace existence Read more

Bitcoin, BTT, Dogecoin Price Movement Analysis for 7th April, 2021

Bitcoin was expected to remain above the $55,800-support, a level that coincided with its 200-SMA. BitTorrent Token was projected to Read more

Leave a Reply

Contact Us