Coinbase is to follow in the footsteps of crypto mining giant Bitmain and conduct an IPO fundraiser. The cryptocurrency giant, founded in 2012, has the largest user base of any exchange with 25 million registered customers, and recently joined forces with Circle to add the USDC coin to their exchange. The $500 million IPO would value the company at around $8 billion, roughly that of communications company Slack, and would further strengthen the bond between the cryptocurrency market and institutional investors.
Ran Reveals Radically Reduced Revenue
Coinbase’s IPO details were revealed on CNBC Crypto Trader by presenter Ran Neu-Ner, who stoked the rumor mill with a tweet days beforehand. Among the breakdown of the figures was a statistic that lays bare the impact of the 2018 bear market. Coinbase’s Q4 earnings for 2017, taking in the epic bull run that saw most cryptocurrencies hit all-time highs, were $450 million. By stark contrast, Q3 of 2018 revealed that revenues were down to $90 million, a drop of 80%. This huge decline in revenue, combined with the news that Coinbase have also let an unconfirmed number of support staff go, might not bode well for their IPO, but it is unlikely to put off investors who, like Coinbase, have faith in the long term health of the cryptocurrency market.
Coinbase Still Thinks A lot of Itself
Interestingly, Coinbase valued itself at $8 billion when it acquired Earn.com in April this year, suggesting that the downturn in cryptocurrencies in 2018 has not had an impact on how much it thinks it is worth, despite its vastly reduced income. With the imminent arrival of institutional money through BAKKT and other investment vehicles, Coinbase clearly thinks retail buyers will come flocking back to the space sooner or later.