Coinbase.com is currently one of the largest Cryptocurrency exchanges in the world which allows users to trade coins such as Bitcoin, Ethereum and so many more. Coinbase was founded in 2012 by founder Brian Armstrong and Fred Ehrsam and is currently based out of Silicon Valley, California. They recently went public back in April 2021 and the stock price has fluctuated in a big way leaving some public investors under water. On the other hand investors who invested in Coinbase Pre-IPO were rewarded in a big way.
There is some correlation with Coinbase share price to the current trading price of Bitcoin. When Coinbase shares peaked around $450 bitcoin also was trading at it’s peak. Investors should be concerned with this type of correlation as bitcoin itself is a asset class that tends to fluctuate more than 20% in a given year.
What Were Coinbase Pre-IPO Returns?
If you invested in Coinbase just a few years ago when the company was still private, that decision would have made you a tremendous return. Say $10,000 investment into the company back in October of 2018 would be worth over $65,789 at the IPO price of $250. That’s a return of over 650%.
Coinbase has a current share price of around $80 a share. Private investors are better off than public investors who purchased shares at the IPO.
In October of 2018 Coinbase raised $300M at a valuation of $8.06B and share price of $36.19. They went public on April 14, 2021 at a reference price of $250 and traded as high as $450. Private investors showed a huge return in just 2 years time investing in Coinbase while it was still private.
The Story Of Coinbase
What's next for Coinbase
Coinbase has recently come under some heat for disclosing what would happen if the company were to go bankrupt due to an SEC filing. This shook investors when they found out that the coins held in their Coinbase account would be lost in this type of sceranrio. Although the current CEO, Brian Armstrong assured investors that they simply had to disclouse these events there was no risk of Coinbase going bankrupt.
Coinbase has to continue its massive growth of new users and win back some creditability that it lost in this recent public news cycle. If your considering investing in Coinbase at these levels today you should consider both the risks and potential upside the stock could have. Bitcoin has also undergone a huge sell off alongside the public stock market so there is still a lot of uncertainty and risk floating around in the market.