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Riding the wave of bitcoin’s 300% rise last year, cryptocurrency trading platform Coinbase is slated to become fintech’s next big initial public offering. It recently announced plans to pursue a direct listing—opting against a traditional IPO where investment banks serve as intermediaries and underwriters—and sell shares directly to the public. Now Coinbase investors are touting sky-high expectations for its market value. “I think it’s headed north of $100 billion,” says Olaf Carlson-Wee, CEO of crypto investment firm Polychain Capital who first invested in Coinbase in 2017. Before that, he was also Coinbase’s first employee.
“It’s the first legitimate IPO from the entire blockchain sector,” he says. He thinks Coinbase’s complex technology, regulatory licenses and loyal customer base are competitive advantages.
In the last three months of 2020, Coinbase’s annualized revenue was $2.3 billion (nearly $600 million per quarter), according to a person familiar with its finances. Net profit margins are more than 20%, another person said. That profitability is on par with incumbent stock brokerages like Schwab and unusual for a young, fast-growing financial services company. Coinbase declined to comment for this article due to the regulatory “quiet period” it’s under leading up to its public market debut.
Another Coinbase investor thinks the San Francisco company could price its shares at an implied market value of $70 to $100 billion. Other recent reports have pegged Coinbase’s market value at $75 billion and $50 billion.
The article was prepared based on the information: Forbes
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