The crypto bull market is in full swing, so it is no surprise that Coinbase is doing well and on track for a big public listing. In this post we look at the implications of this IPO (actually a DPO = Direct Public Offering) on the crypto ecosystem.
– the Coinbase DPO will Accelerate the crypto bull market. Their people will be in interviewed in the media and headliners in events and will tell a bullish tale. An IPO/DPO today is more of a media and liquidity event than a funding event, particularly if it is a DPO (where the company raises no money)
– the Coinbase IPO/DPO will make crypto respectable. This will be crypto in a suit. The cypherpunks who got into crypto early will not be made to feel welcome. This will lead to more focus on privacy specific coins and privacy features in big platforms like Bitcoin and Ethereum.
– Coinbase will become a Public currency acquirer on the speed dial of every investment banker who is representing an exciting crypto venture. This will drive the innovation cycle, prompting more early stage deals.
We can see this impact coming. Here are two simple things we don’t know yet:
- On what date will Coinbase be public? This is not only academic interest for us. Daily Fintech is building it’s own index of public traded Fintech stocks. At publish time time Coinbase is not yet public, so it is not in our index. As soon as it is we will rebalance, adding Coinbase and dropping another stock to keep to our 50 limit.
- When will Coinbase grow into into it’s valuation? With all the stimulus money, I am assuming the valuation will be high. There is talk of $100 billion market cap valuation. If Coinbase revenues grow fast quarter to quarter, their operating leverage will turn that into rapid profit growth and so Coinbase could grow into into it’s valuation. Let’s wait and see how Coinbase’s quarter to quarter revenue growth pans out.
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