Coinbase on Nasdaq is one of the most anticipated events of the year on Wall Street, where enthusiasm for record-breaking bitcoin is in full swing, despite questions about the sustainability of the market. The first company devoted entirely to cryptocurrency to enter the U.S. stock exchange, Coinbase – which will be listed under the symbol COIN – is already a heavyweight. That makes Coinbase the biggest new U.S. stock market entrant since Uber in 2019. Coinbase chose a direct listing, which does not allow it to raise new funds but does offer current shareholders – founders, employees and historical investors – the opportunity to sell their stocks on the market. Coinbase claims 56 million total users and a little more than 6 million people making transactions each month, according to estimates from its first-quarter results. The company has benefited from bitcoin’s meteoric rise over the past year, with the crypto asset’s price rising from $6,500 last April to a record-high above $63,000. As a result of this craze, Coinbase’s revenue has increased almost tenfold in the course of a year to $1.8 billion in the first quarter, according to group estimates. Its profit increased 25-fold, in the range of $730 to $800 million.
Coinbase was recently charged by the U.S. Commodity Futures Trading Commission (CFTC) of “reporting false, misleading or inaccurate” information about cryptocurrencies and manipulating the market between 2015 and 2018. Without admitting wrongdoing, Coinbase paid a $6.5 million fine, and the company was forced to push back its listing date on Wall Street. Another factor that could put Coinbase at a disadvantage is its commissions, which the company uses to earn money. These levies are higher than some of its competitors, particularly Binance, which was founded in China and seems to alarm regulators even more than Coinbase.