- Coinbase posted its S-1 filing on Thursday morning, revealing its financial details.
- The crypto giant saw $322 million in 2020 profit thanks to Bitcoin’s bull run during the pandemic.
- Coinbase’s direct listing will be a major symbolic moment for the entire crypto industry.
The recent Bitcoin bull run helpedpull in a profit of $322 million on revenues of over $1.2 billion in 2020, putting the cryptocurrency giant in a strong position as it prepares to sell its shares to the public in its upcoming direct listing on the Nasdaq.
The figures, disclosed in an S-1 regulatory filing, give the first detailed look at the financial performance of Coinbase, which launched in 2012 as a user-friendly way for consumers to buy, but which has since added a and a variety of banking-like services for the burgeoning cryptocurrency industry. Coinbase says it has seen $456 billion in lifetime trading volume on its platform.
The company first disclosed its intent to go public in December.
Coinbase’s 2020 profit of $322 million compares to a loss of $30 million in 2019, and its 2020 revenue jumped 140% from the $533 million it earned in 2019.
The jump is not surprising given that Coinbase earns the bulk of its revenue on trading commissions, and that interest in cryptocurrencies surged late last year as therose from around $10,000 in September to over $30,000 by the end of the year. Bitcoin is currently trading around $50,000.
In a letter to investors, Coinbase founder and CEO Brian Armstrong said: “Coinbase is a company with an ambitious vision: to create more economic freedom for every person and business. Everyone deserves access to financial services that can help empower them to create a better life for themselves and their family, but today we’re a long way from that vision.”
Coinbase, which has recently been valued at $100 billion, is one of the most hotly anticipated public offerings of 2021. And like other buzzy Silicon Valley unicorn offerings such as Palantir, Spotify, and Slack, Coinbase has chosen to forego the traditional IPO process in favor of a direct listing—a process that allows firms to float their shares directly on the market, instead of Wall Street banks lining up underwriters and setting an opening price.
Until recently, companies that chose to list directly could not float new shares, only sell existing ones. But a December order by the SEC changed that rule such that firms can issue new shares through direct issues, increasing the potential amount of money they can raise.
In the case of Coinbase, the company’s share prices have been trading around $300 on private exchanges. That could be a key clue in determining what price Coinbase chooses for its debut, though a person close to the company says this will not be the only factor in the pricing decision.
Thursday’s filing reveals that venture capitalist Marc Andreessen owns the most common stock in Coinbase with over 5.5 million shares, followed by Armstrong, who has over 2.7 million shares. Armstrong retains a 21.8% voting stake, while his co-founder Fred Ehrsam has a 9% voting stake, with Andreessen controlling 14.2% and another early investor, Fred Wilson, having an 8.2% voting share. An 11-member group of executives and board members will together exercise 54% voting control.
And in a nod to Bitcoin’s pseudonymous co-founder, the front page of the filing states that a copy of it will be sent to the Bitcoin wallet address of Satoshi Nakamoto.
The filing also reveals that Coinbase has 43 million “verified” users, and 2.8 million monthly active users.
Major milestone for the crypto industry
The arrival to the public markets of Coinbase, which will list under the ticker symbol COIN, is not only a milestone for the company and its co-founders, but for the cryptocurrency industry as a whole. A high valuation for Coinbase when it hits the public markets will provide an important benchmark as investors look to put a price tag on a raft of other crypto companies, including exchanges and storage providers.
It will also be an important symbolic moment for the crypto industry.
For years, governments and law enforcement agencies have stigmatized cryptocurrency as little more than a tool for criminals and hucksters, while pillars of the financial establishment—including Warren Buffett and JP Morgan CEO Jamie Dimon—ridiculed it as “rat poison” and worse. But such perceptions have shifted remarkably in the last two years, in no small part thanks to Coinbase, which has forged banking relationships with Goldman Sachs and JP Morgan, and helped companies like Tesla make major Bitcoin purchases.
Coinbase’s public listing will mark another major moment in crypto’s evolution towards mainstream maturity and respectability.
Grayscale’s Top Executive Joins Robinhood as New Chief Compliance Officer
Robinhood hires a new CCO, the chief compliance officer of Grayscale
Robinhood brokerage app has welcomed Benjamin Melnicki as a new Chief Compliance Officer, who is also the holder of the same position at Grayscale Investments. He joined Grayscale in early January this year.
At the moment, Robinhood’s cryptocurrency arm is facing scrutiny from financial regulators. Last year, Robinhood was a target of an investigation connected to anti money laundering and certain cybersecurity problems experiences by its crypto division.
*Robinhood's Crypto Unit Hires New Chief Compliance Officer From Grayscale
*Benjamin Melnicki's Appointment Follows Scott Hershorin's Departure in June
*Appointment Comes as Robinhood's Crypto Unit Faces Regulatory Scrutiny$HOOD— *Walter Bloomberg (@DeItaone) September 24, 2021
As reported by U.Today previously, later this year, the brokerage firm plans to roll out cryptocurrency wallets for its users. The trials of wallets will kick off in October and will allow customers to deposit and withdraw cryptocurrencies to addresses beyond Robinhood seamlessly.
Average Aussie crypto portfolio grew 258% in FY 20-21, survey reveals
The average portfolio size on Australian cryptocurrency exchange BTC Markets has grown from $577.65 (795.5 Australian dollars) to $2,069.16 (2849.5 AUD) in the financial year 2021, signaling a 258.2% increase in portfolio holdings, according to exchange data compiled by Statista on a recent BTC Markets survey.
Data on the survey shows that the average portfolio size of female and male investors in fiscal 20-21 on BTC Markets was $1,924.30 (2,650 AUD) and $2,214.03 (3,049 AUD), respectively. However, in 2020, the average portfolio size of female Aussie investors exceeded male investors slightly.
Transaction data on the exchange also showed a pattern of growing investment demand with aging. Considering the data provided by BTC Market on Australia’s average initial investment, investors above 65 years old have invested roughly $3,158.03, the highest ofall demographics.
Following an incremental reduction across the various age groups, the youngest cryptocurrency traders, ranging from 18 to 24 years, tend to make comparatively small investments, standing at $792.96 on average. While older Australian crypto investors outweigh the new generation in initial investment, the younger crowd shows comparatively more activity in terms of daily trades.
Resonating the findings above, a September report from financial comparison website Finder shows that one in six Australians own cryptocurrencies, amounting to $8 billion in total investment. The report suggests that, like many other users in advanced industrialized countries, Australians were increasingly viewing cryptocurrencies as a new asset class.
According to Cointelegraph’s report on the matter, Bitcoin (BTC) is the most popular cryptocurrency for the Australian crypto market held by 9% of investors. Other popular investments include Ether (ETH), Dogecoin (DOGE) and Bitcoin Cash (BCH). The report showed that, despite the growth in crypto investments, a significant barrier to entry for Australians is the difficulty in understanding crypto and the risks related to volatility.
Switzerland to Impose Anti-Money Laundering Rules on Crypto Providers: Report
FINMA requires all cryptocurrency providers to step up their game and monitor whether criminals use digital assets in illicit transactions.
The Swiss Financial Market Supervisory Authority – FINMA – would reportedly require local digital asset providers to take additional steps in preventing criminals from employing cryptocurrencies. The watchdog would also turn its sight towards bitcoin ATMs as it believes that drug dealers often use these machines.
FINMA Targets Criminals Operating with Crypto
According to a Finews report, Switzerland’s financial regulator – the Swiss Financial Market Supervisory Authority or simply FINMA – would closely supervise local crypto providers as an attempt to clamp down on money-laundering transactions.
Swiss platforms and brokers dealing with digital assets would have to enhance their monitoring efforts and observe if bad actors employ cryptocurrencies. The Bern-based watchdog believes the initiative is “urgently necessary,” stressing that criminals use the asset class even to fund terrorism acts.
FINMA also turned its attention towards bitcoin automated teller machines. According to the regulator, drug dealers frequently use such ATMs as payment systems. It is worth noting that Switzerland is a relatively small nation, but its 130 Bitcoin automated teller machines place it in the sixth position among the countries with the most stations.
FINMA also passed an anti-money laundering provision according to which it lowered the threshold for unidentified crypto purchases from 5,000 Swiss Francs (CHF) to 1,000 CHF (around $1,080). Or, in other words, all financial providers dealing with digital assets have to collect data on anyone initiating transactions that exceed this amount.
UBS: Crypto Regulations Could Spell Trouble
One of the leading banks in Switzerland – UBS – recently shared its views on the hot topic of digital asset regulations as it indicated that implementing certain rules might negatively impact the market.
Furthermore, the bank warned its customers that regulatory crackdowns can pop the “bubble-like” crypto markets. The Swiss bank also labeled the asset class as “speculative” alerting that it could be dangerous for professional investors:
“While we can’t rule out future price gains in cryptos, we see this as a speculative market that poses significant risks to professional investors.”
On another note, though, when the cryptocurrency market was booming at the beginning of May, UBS demonstrated a different attitude. Back then, it intended to enable its wealthy customers to receive digital asset exposure later in 2021 through third-party vehicles.
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