Today Coinbase ($COIN) marks the largest direct listing IPO in history, valued privately at $100B (joins Target, Goldman Sachs, GE, and BlackRock) with over 56M users. Certainly monumental numbers, but what’s the story?
Coinbase is an exchange for only cryptocurrencies.
The mindblowing market cap brings pure crypto exposure to the masses in really easy steps. Its platform serves as a starting point for onboarding to digital currencies that run on blockchain technology. It’s the simplest and easiest access to the crypto industry that the public has ever had and is poised to disrupt traditional markets and banks.
How Big is Big?
Coinbase is a 9-year old, purely crypto company with $1.8B in revenue. For all of 2020, trading volume was $193B, however, in just Q1 of 2021, earnings skyrocketed to $335B. Coinbase is a unicorn in a hyper growth industry that shows no signs of slowing down. The crypto economy is in its infancy while being valued at $2 trillion, so this public offering opens up a huge opportunity for consumers, retails and institutions alike.
First, there are both institutional and retail effects by the Coinbase offering. Co-founder and CEO of MicroStrategy, Michael Saylor tweeted, “Simple arithmetic implies @Coinbase is gaining 1 million users & 10 billion in digital assets each week…wake-up call for institutional investors, financial advisors, and investment banks worldwide”. Centralized finance (CeFi) will compete and be forced to adapt to decentralized finance product offerings. These DeFi products remove barriers to access and “middle men”, and put pressure on the traditional finance instruments which risk becoming obsolete. Traditional finance and Central Banks can’t avoid this shift to digitization and decentralization.
Second, consumers will have direct access to DeFi products with little on-ramp friction. Following on the heels of the recent NFT surge which relies on blockchain technology and cryptocurrencies, Coinbase could be the platform that opens up the DeFi conversation to a wider population. As such, it means more capital into DeFi tokens and DeFi users.
The Coinbase public offering will be remembered as the introduction to cryptocurrencies as a traditional asset. This is the watershed moment for crypto and blockchain enthusiasts; millions of new users embracing cryptocurrencies, at the same time, NFTs intersecting art, community, finance, and blockchain.