It’s been a big year for Coinbase. The cryptocurrency exchange made headlines in April when it announced it was going public via a direct listing.
The move made Coinbase the first major crypto company to go public and was seen as a major milestone for the industry.
Now, there are reports that Coinbase is planning to do another big thing: an initial public offering (IPO).
The Wall Street Journal reports that Coinbase is “in talks” with investment banks about going public through an IPO. The report cites people familiar with the matter and says that no final decisions have been made yet.
This isn’t the first time that there have been reports of an impending Coinbase IPO. Back in 2018, there were similar rumors that the company was planning to go public.
At the time, Coinbase denied the reports, saying that it had no plans to do an IPO.
So, what’s changed since then?
For one thing, Coinbase has continued to grow at an impressive rate. The company now has more than 35 million users and is on track to generate $1.
3 billion in revenue this year. That growth has been fueled by the booming interest in cryptocurrencies over the past year.
Another factor is that going public through an IPO would give Coinbase more flexibility when it comes to raising capital. Unlike a direct listing, which only allows existing shareholders to sell their shares, an IPO would allow the company to sell new shares to the public.
That would give Coinbase a war chest of cash to invest in its business and continue its rapid growth.
There are also some tax benefits associated with an IPO that could be appealing to Coinbase. When a company goes public, it can “lock in” its tax losses at their current value.
That means that when Coinbase eventually becomes profitable (as it almost certainly will), it will be able to shelter a large portion of those profits from taxes.
Of course, there are also some risks associated with an IPO. The most obvious one is that it would open up Coinbase’s financials to public scrutiny.
That could be problematic for a company like Coinbase, which has been criticized for its lack of transparency in the past. Another risk is that going public could make Coinbase a Target for regulators who have been cracking down on the cryptocurrency industry recently.
So far, there’s no word on when Coinbase might go public if it does decide to do an IPO. But given the company’s impressive growth and the potential benefits of going public, it seems like only a matter of time before we see Coinbase on the stock market.