In a way, Coinbase is a role model for the cryptocurrency sector. It adopted — not fought — legislation that renders it different from other crypto exchanges, while the firm’s trading application is praised for being user-friendly. When JPMorgan agreed earlier this year to expand conventional banking solutions to cryptocurrency firms in the U.S. — an important move — it began with Coinbase and Gemini, yet another exchange from the States.

Thus, last week’s announcement that Coinbase submitted an application for registration for an IPO with the SEC was not exactly unexpected, but it’s still major news — and not only because the research company Messari said that the thirty-five-million-dollar business could be evaluated at $28b.

 

That’s a big thing, according to some experts, and not in the States alone but on European territory, too, since the initial public offering will give a marker on how marketplaces are ready to value such firms.

Coinbase is going to be a pioneering cryptocurrency firm – the first cryptocurrency-native corporation to be listed on the big stock exchange in the States, and its initial public offering is going to be a big thing for the sector.

In the meantime, Edward Moya, a senior marketplace analyst at FX trading firm Oanda, said it seems fantastically timed after major breakthroughs with BTC’s mainstream acceptance, higher demands for cryptos, and expanding institutional interest.

Coinbase, as well as other unicorns, is going to be facing lots of talk around the town just because the initial public offering marketplace became so popular. Some already named the marketplace “Tech Bubble 2.0” and are comparing it with the listings of web-based enterprises during the dot.com explosion of the 90s.

There’s lots of money out on the marketplaces at the moment, and seeing the high demand for initial public offerings, one would expect the deal to be oversubscribed. The Grayscale and Bitwise fund premiums suggest that there’s a huge hunger for exposure to cryptos in equity marketplaces, which should encourage a warmer reception of Coinbase’s stock. The initial public offering activity happens in cycles, oscillating among hot and cold marketplaces. We’re now in the midst of one of the most in-demand initial public offering marketplaces in recent times. Along with BTC at record levels, this is a very good time for Coinbase to go public.

Thanks to the stimulus initiatives incurred by the pandemic, the worldwide economic landscape is full of liquidity, with few places for investing. Bond yields are nearly zero. In such a setting, public demand for equity interests in innovative high-growth technology firms such as Coinbase is heavy.

Worries over service outages

If there are some unexpected situations, like lots of media exposure of a novel (or mutated) disease, that may render marketplace observers wary of risk, rendering it less probable that they will deposit their capital into an initial public offering.

Furthermore, Coinbase has consistently deteriorated during higher demands. In 2017, when the Securities and Exchange Commission rejected the Winklevoss BTC’s ETF, and Bitcoin prices then went down, several investors were not able to trade via Coinbase. This may be a factor in the investor’s estimation during the initial public offering, as capacity problems carried on this year.

In addition, Coinbase has a public image difficulty that needs to be worked on, and that’s not a simple task. Some of their black workers shown worries regarding unfair situations, and this year, workers were also demoralized by internal communication to bring into the light of social issues or politics. But in 2021, firms need to work on inclusion and diversity. If Coinbase fails to do so, they will miss out on gaining from this chance.

Some experts don’t agree that the exchange had an issue and stated that the firm would be regarded as one of the more secure cryptocurrency plays if the initial public offering was to occur. Interest from Europe is probably to be more muted than in the USA, which is the standard seeing the more traditional investment patterns of investors from Europe. Though, he confirmed that he already knows about a few family office spaces in Europe, eyeing allocation.

Some think that investors don’t care about hiring practices or whether workers are allowed to have political discussions, Still, even if institutional investors do prefer a chief executive officer such as Brian Armstrong of Coinbase, retail investors, who are a key player in the company, nay think in a different way.

Bringing new entrants

The IPO could drive up cryptocurrency acceptance because businesses that pull through the procedure — with months of reviews by regulators, researchers, and institutional investors— frequently emerge battle-tested and more securitized.

Virtual assets, and initial public offerings, were performing at nearly-record levels this year, and this happening could introduce new names into the arena who had previously concentrated only on initial public offerings. The risk aversion for both areas is alike, too – Coinbase’s initial public offering will further bring validity to the crypto-asset class for the public at large, which will drive up crypto-acceptance.

This is for sure a step to legitimizing cryptocurrencies and going into the mainstream. The big issue is that though Coinbase is subject to regulatory observance, some price-driven exchanges may be under a bit of scrutiny, which means that the marketplace is still a subject of manipulation.

All in all, however, the majority of close observers regarded the Coinbase initial public offering as a signal victory for the crypto and blockchain sector. One remembers the failings of other cryptocurrency-native listings. Some failed for disreputable reasons, others due to difficult regulatory requirements in the States.

The initial public offering is a big thing and showing that the road of Coinbase to work in the regulatory procedure is profitable. The Coinbase initial public offering may signal another inch into the mainstream for cryptos. This will assist in carrying on the procedure of making cryptos additionally open to investors and possible clients.