Investors always want to find an opportunity on the ground floor that makes them rich. When a well-known and respected private company decides to go public, it creates a bout of buying interest that often ends up bringing in large amounts of POPs into the stock price on the first day. As we’ve seen in 2020 from hot IPOs like Snowflake (New York Stock Exchange: Snow) And the Airbnb (Nasdaq: ABNB), Those who are able to obtain IPO shares directly from subscribers are making huge profits. However, those left on the outside looking inward have to pay premium rates on the open market in order to acquire the shares.
A large group of companies will likely go public in 2021, as many have already filed the necessary paperwork with the US Securities and Exchange Commission. Companies like Instacart delivery logistics platform, Petco pet stores and mobile investment app pioneer Robinhood are getting a lot of attention in 2021.
But in my opinion, there is one company that outperforms the rest. With its uniqueness in one of the hottest investment regions on the planet right now – cryptocurrency – Coinbase will be the real place to buy. IPO For the year 2021.
How Coinbase is capitalizing on the cryptocurrency craze
Coinbase operates one of the most popular cryptocurrency exchange platforms in the US market. It allows people to buy and sell bitcoin and a wide range of other tokens, with a simpler interface for regular investors and a high-level Pro service for advanced traders.
Additionally, Coinbase offers cryptocurrency wallets for those looking to keep their cryptocurrency. Wallets allow Coinbase members to send and receive cryptocurrencies to each other in an easy and secure way, with a relatively easy-to-use interface that simplifies the process of transferring crypto assets.
You don’t have to love Bitcoin to love Coinbase
If you really shake your head think about it Bitcoin is the most dangerous investment of allI get it. a lot of Smart investors got into the cryptocurrency cart In recent months, however, there is still a healthy debate, and many see the entire coding craze as a bubble that must eventually burst.
But here’s the thing: You don’t have to invest in cryptocurrencies in order to love Coinbase. IM tall Starbucks (Nasdaq: SBUX) Investor, but I hate coffee. That hasn’t stopped me making a lot of money from the chain’s coffee giant’s stock – and I can’t help but smile every time I pass by a Starbucks with a long line of caffeine addicts waiting to pay a few dollars for a daily latte.
Coinbase is in the same position. The exchange already has 35 million verified users, with a trading volume of $ 320 billion. Coinbase users own $ 25 billion in cryptocurrency assets on the platform. Moreover, Coinbase is a global company, with users in more than 100 countries and over 1000 employees.
The best thing is that Coinbase collects fees for every transaction its users make. The company’s website says it charges a roughly 0.5% difference on purchases and sales of crypto assets. Moreover, Coinbase charges transaction fees ranging from $ 0.99 to $ 2.99 on transactions up to $ 200, and a 1.49% variable rate on purchases with a bank account or Coinbase wallet. A base rate of 4% applies to transactions that do not qualify for a partial assignment depending on the payment method.
To be clear, professional traders don’t pay anywhere near these amounts, with a tiered fee schedule enabling some high volume traders to buy and sell cryptocurrencies for no fees at all. However, even non-volume-generating traders serve a valuable role in building liquidity on the Coinbase exchange, helping to create a leadership role in the fast-growing business.
Initial public offering
Usually, companies looking to go public are required to provide investors with massive disclosures early in the process. However, Coinbase has benefited from modern rules Allowing companies considering IPOs to submit their own draft registration data on a confidential basis. That’s what happened in mid-December, when Coinbase tweeted about the introduction of a SEC.
Coinbase did not speculate about when to proceed with the IPO, only saying that it expects the S-1 registration to become effective once the SEC completes the review process. It will be up to Coinbase to determine the exact timing, although some believe the company may go public as early as February.
Until the IPO documents are released, investors won’t know for sure how profitable Coinbase is. However, you can actually see a few things that make it promising:
- Fee income amounts to even a fraction of the $ 320 billion in cryptocurrency trades into big money.
- The Bitcoin boom has led to more investors than ever looking for ways to trade cryptocurrencies, and Coinbase has proven itself as a novice place to start.
- Coinbase fees are competitive with consumer-facing companies such as PayPal Holdings (Nasdaq: PYPL) And the Field (New York Stock Exchange: SQ).
- Coinbase’s most recent private financing round came in 2018 and the company was valued at $ 8 billion. This came after the first massive rally of Bitcoin, but it came after the cryptocurrency gave up much of its gains.
Keep your eyes on Coinbase
It is also possible for Coinbase to choose to go public by using a direct listing instead of Underwriting underwriting. If that happens, the shareholder sale will be in a position to get more pop on the first day rather than give it to Wall Street’s hottest.
Whether you love or hate Bitcoin, Coinbase gives you an opportunity to profit from it no matter what happens to the cryptocurrency prices. This will keep me watching closely as 2021 continues to see what Coinbase says in its IPO documents when they finally get published.