This puts the company directly in the top 85 most valuable companies in the United States. The site, which is less than ten years old, manages about 186 billion euros worth of cryptocurrencies. This is more than 11 percent of the total value of the market. With 56 million customers, Coinbase is one of the largest cryptocurrency trading platforms.
The growth of the company is unparalleled compared to other technology companies that have recently gone public. In the last round of funding in 2018, the company was valued at less than 7 7 billion. Now it is thirteen times more. Between January and March this year, the company had a turnover of 1.5 1.5 billion.
This is related to the frenzy in the crypto market. Earlier this year, the value of a bitcoin was still 25 thousand euros, and now the counter is over 50 thousand euros. Coinbase deducts one percent from each transaction. As the value of bitcoin increases, so does the return on coinbase. The company accounts for 96 percent of transaction costs.
Those transaction costs are high. European customers pay three euros for small transactions. For more than about 170 euros, customers pay a rate of one and a half to four per cent.
Coinbase is based on the popularity of cryptocurrencies. In 2019 it became clear that its value and with it Bitcoin’s interest had plummeted. Coinbase lost about 25 million euros. One year later, the loss was offset by a profit of 269 million euros.
The IPO comes at a time when more money is being invested in cryptocurrencies. Technology investors are looking for success stories and quick returns.
But there are risks involved, the company warns in the prospectus. Customers who provide access to cryptocurrencies will lose their ‘key’, the company could face cyber attacks and the bitcoin market will collapse as it is. In the latter case, the turnover falls. “Our business results vary considerably due to the very turbulent nature of crypto,” the company writes.
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