Coinbase IPO: How to buy Coinbase shares from Australia
In 2018, Coinbase was valued at US$8 billion. Today the company is touted to be worth around US$100 billion.
The cryptocurrency market has grown considerably over the course of 2021. Now the biggest cryptocurrency trading platform in the United States, Coinbase, has announced its intention to list on the Nasdaq after filing with the US Securities and Exchange Commission (SEC) on Thursday.
The crypto giant first showcased its interest in pursuing an Initial Public Offering (IPO) back in December 2020. However, things didn't materialise.
As per Thursday’s filing, Coinbase accrued a total revenue of US$1.1 billion in 2020, representing a 100% gain over its associated 2019 total of US$482 million. Previous estimations had Coinbase’s value somewhere close to the US$8 billion mark. However, with the crypto market soaring and a wave of new investors entering this yet nascent space, it's estimated that the exchange may now go public for more than US$100 billion.
If successful, the IPO would be the highest-profile share listing of a company that has a vast majority of its operations directly linked with the crypto sector. Not only that, it will most likely bring a further air of legitimacy to this burgeoning asset class.
How to buy Coinbase shares
Buying pre-IPO shares in a US company is difficult for Australian investors. Unless you're connected to a full-service broker with ties to US business, you'll mostly be out of luck.
The easier option is to buy shares in the company once it lists on the stock exchange. We don't yet have a date as to when this might be, but some reports suggest it could be as early as March 2021.
To buy shares once Coinbase goes public, you'll need a brokerage account that has access to the US stock market. If you don’t have one, you can do so quite easily by looking for a trading platform that charges low commissions, offers user-friendly trading tools, and has a good market standing.
In order to open your brokerage account, you will need to provide your personal and financial details, including your ID. Once your account is up and running, you will need to top it up with funds, something that can be done via a bank transfer, credit card or debit card.
To buy Coinbase stocks, you need to search for the company name or its ticker symbol. However, before going ahead with a purchase, it is essential that you do your research regarding the company. "Buys" can be facilitated using a market order or a limit order, with the latter allowing users to make a purchase when prices reach their desired levels.
A more detailed look at the move
In its filing, Coinbase made it clear that it had yet to receive the green light from regulators that will allow it to trade crypto assets that have been deemed as "securities" within the United States’ borders.
It's pertinent to note that American regulators currently classify Bitcoin as a commodity, however, a number of other premier currencies are yet to be classified as either securities or commodities.
For example, a couple of months back, the SEC filed a lawsuit against Ripple, the firm operating the world’s fourth-largest digital asset by market cap "XRP", claiming that the company was conducting an unregistered securities offering.
Coinbase is widely considered to be one of the premier cryptocurrency trading ecosystems in the world today, boasting more than 43 million users spread out across 100 different nations. Not only that, the company has many high-profile investors including the likes of Andreessen Horowitz, Union Square Ventures (USV) and Ribbit Capital.
Lastly, a closer look at the crypto giant’s filing shows us that between 2019 and 2020, it was able to rope in a net income of US$322.3 million, swinging from a loss of US$30.4 million just the year prior. Furthermore, the document gives no indication of when the company plans to list its share on Nasdaq or for how much its shares are currently trading for within private markets.