Coinbase IPO: 5 things to know about US currency exchange

Here’s what to know about the popular trading platform before its public offering.

What is Coinbase?

The Silicon Valley crypto exchange was co-founded in 2012 by Brian Armstrong, 38, who runs the platform’s chief executive. Fred Ehrsam, director of Coinbase, also helped create the company.

There are two classes of Coinbase shares. Armstrong holds 11% of the Class A shares and 22% of the Class B shares, while Ehrsam holds 11.4% of the Class A shares and 9% of the Class B share.

According to Forbes, Armstrong’s networth is currently $ 6.5 billion, based on his ownership of the company, which will likely increase if direct listing successfully disappears.

Coinbase is billed as a bet on the rapidly growing cryptoeconomy, which starts with cryptocurrency asset no. Bitcoin, but far exceeds this, say Armstrong and company.

Bitcoin BTCUSD Prices,
-2.56%
gained attention as it rose to record highs, most recently reaching a recent high of over $ 58,000 over the weekend, before starting to give up some gains in recent transactions.

Last week, Bitcoin reached a market value of $ 1 trillion, and even though the asset created by a person or persons known as Satoshi Nakamoto represents about 70% of the total cryptocurrency market, there are a number of other popular cryptocurrencies. traded on Coinbase, including ETHUSD ether,
-1.44%
on the Ethereum blockchain, Bitcoin Cash BCHUSD,
-4.45%
and Litecoin LTCUSD,
-6.72%,
to name a few.

Who else owns Coinbase?

Venture capital firm Andreessen Horowitz is the largest owner of Coinbase, with approximately 25% of Class A shares and 14% of Class B shares. Marc Andreessen, head of venture capital equipment, is also on the board of directors. Coinbase administration.

Coinbase echoes the ambitions of Robinhood Markets

“Coinbase is a company with an ambitious vision: to create more economic freedom for every person and business,” Armstrong wrote in a letter attached to the company’s public filing documents with the SEC.

The biggest risk factor

Undoubtedly, the biggest risk factor in Coinbase is that it is a bet on an unproven asset class that was created just over a decade ago. Coinbase is trying to clarify that its fate is linked to the prospects for Bitcoin and ethereum and thousands of other alternative currencies that have been written into existence.

But a drop in interest and harsh regulations in the US and elsewhere could hamper the trading platform.

Here, Coinbase explains:

“There is no assurance that any accepted cryptocurrency will maintain its value or that there will be significant levels of trading activity. If the price of crypto assets or the demand for trading crypto assets fall, our business, operating results and financial condition would be adversely affected. Most of our net income comes from transactions in Bitcoin and ethereum. If demand for these cryptographic assets decreases and is not replaced by a new demand for cryptographic assets, our business, operating results and financial condition could be adversely affected.Coinbase writes in its S-1 document.

How Big is Coinbase?

The crypto exchange platform ranks 3rd among the largest digital asset exchanges in the world, according to data site CoinMarketCap.com. This ranking places it behind Binance, based in Seattle and Huobi Global, a cryptocurrency exchange based in Seychelles based in China.

In the US, Coinbase is by far the most popular cryptographic platform, but there are competitors, including Gemini, led by Tyler and Cameron Winklevoss, who used their famous Facebook FB,
-3.64%
settlements to invest in bitcoin.

Kraken is another popular cryptographic platform and a direct competitor in the US

Odds and ends

The company, in its public filing, paid a series of tributes to the founder or founders of bitcoin and the digital currency era in its transmission.

For example, he listed the genesis block associated with Satoshi Nakamoto in “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa,” whose 2008 white paper set bitcoin in motion. (In addition, a “Satoshi” is the smallest bitcoin unit – 0.00000001 BTC).

The company does not provide any physical address for its California headquarters, citing the COVID-19 pandemic, which forced a number of companies to have most, if not all, of its staff working remotely. For this reason, Coinbase refers to itself as “a remote company”.

However, the lack of an address to some was seen as aligned with the decentralized nature of the blockchain and bitcoins.

The company also provided a useful handbook on cryptocurrency terms, including the definition of terms such as “hodl”, which have become popular in cryptocurrencies. Hodl was accidentally invented in a Reddit in 2013 and means a long-term owner of an investment.

Read: Don’t fight FUD: HODL on this list of bitcoin terms you need in your vocabulary

Armstrong crypto charity

In 2018, Armstrong launched GiveCrypto.org, which makes direct cash transfers to people living in poverty.

“People who invested early in cryptography accumulated an enormous amount of wealth in a relatively short time. However, the reputation of the cryptographic community has been dominated by “bros in Lambos” images, whose antiques are getting a lot of attention, “Armstrong wrote in a separate blog post on Medium in 2018.

Armstrong allegedly donated at least $ 1 million to GiveCrypto.