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- Coinbase recently announced its plans to engage in a direct listing instead of IPO.
- The crypto exchange could hit a US$100-billion valuation.
- Brian Armstrong could make billions more if Coinbase attains a $100-billion valuation.
On February 25, cryptocurrency exchange, Coinbase, filed to become a public company and disclosed that its total revenue rose to US$1.27 billion in 2020, generating a profit of $322 million.
Coinbase is a US-based currency exchange, which started in 2012. It offers a secure platform to buy, sell, and store cryptocurrency. The Company had 43 million authenticated users at the end of last year.
The registration documents of the company reveal that the crypto exchange owns $316.1 million worth of crypto assets as of 31 December 2020, up from $33.9 million in 2019.
The Company plans to go public through direct listing rather than the IPO route. The step has been taken due to a boost in the cryptocurrency space with Bitcoin gaining huge attention amongst investors and companies.
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Direct listing involves employees and investors transforming their ownership stakes into stock, which is listed on an exchange.
Coinbase could hit $100-billion valuation
Coinbase investors are projecting that the market value of the crypto exchange could rise up to $100 billion amid soaring value of bitcoin and its plans to pursue a direct listing.
If a crypto market cycle is factored in, it will be much safer for Coinbase to go public in the midst of a bull run rather than at the end of it, if bitcoin continues to rise this year. Otherwise, it risks a sharp decline in revenue (most likely stock price), ultimately turning away buyers.
The stock of the San Francisco-based firm is scheduled to begin trading publicly in the first or second quarter of this year.
Coinbase’s CEO could make billions more
Brian Armstrong, CEO of Coinbase, made about US$60 million in salary, stock options, and other compensations in FY20, as per the S-1 filed by the cryptocurrency firm. The compensation package of Armstrong puts him in a robust position, even ahead of the CEOs of JPMorgan Chase and Apple.
Jamie Dimon, CEO of JPMorgan, earned $31.5 million in 2020, while Tim Cook, CEO of Apple, netted $14.7 million in his pay package last year.
Armstrong’s net worth could be more than $15 billion, as per market reports, if Coinbase hits a $100-billion valuation.