Coinbase IPO: what you need to know on Coinbase shares

Coinbase is a US cryptocurrency exchange with an IPO on the horizon. Here’s everything you need to know about the Coinbase IPO, plus an overview of the company.

Coinbase shares: the basics

We don’t currently know much about the Coinbase’s initial public offering (IPO). What we do know, is that the company submitted a draft registration document with the US Securities and Exchange Commission (SEC) on 17 December 2020.

This document is currently confidential and we won’t know the exact details of the IPO – like the exchange the company is going to list on or its target share price – until it has successfully completed its registration with the SEC.

Coinbase: a brief history

Coinbase was founded in 2012 by Brian Armstrong – who serves as the current chief executive officer (CEO) – and Fred Ehrsam. It is headquartered in San Francisco, and acts as a cryptocurrency exchange and broker for bitcoin, bitcoin cash, ether, ripple, litecoin and others.

The company has been growing since its creation and it registered its intention to carry out an IPO with the SEC in December 2020, meaning that the company could go public in 2021.

What is Coinbase’s business model?

Coinbase has two core products. The first is an exchange for trading the aforementioned cryptocurrencies – known as a Global Digital Asset Exchange (GDAX). The second is a user-facing platform for trading bitcoin, bitcoin cash, ether ripple, litecoin and others.

Coinbase offers accounts to potential clients for cryptocurrency trading. In total, the company offers over 25 cryptocurrencies to its users, some of which are niche opportunities referred to as ‘altcoins’ because they are not widely known in the cryptocurrency mainstream and don’t have the name recognition of bitcoin, litecoin, ether and ripple.

The company charges a commission fee for its users to use its platform and its users can trade with leverage. It has two accounts: regular and pro. The regular account charges higher commissions, while the company’s pro account has lower commission fees for users.

Bear in mind that from 6 January 2021, Financial Conduct Authority (FCA) rules mean cryptocurrency trading in the UK is only available to professional traders. So, you’re no longer able to take a position on popular tokens like bitcoin, litecoin, ether or ripple if you’re a retail trader.

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Coinbase share price: how to analyse Coinbase shares

You should use both technical analysis and fundamental analysis to analyse the Coinbase share price once the company goes public.

  • Technical analysis is concerned with chart patterns, technical indicators and historical price action
  • Fundamental analysis is based on the fundamentals of a company, including its net revenue or profit and loss statements

You should use a mix of both of these forms of analysis when assessing the Coinbase share price once the company lists – especially since the company’s share price could be volatile given the inherent volatility in the cryptocurrency market.

Interested in analysis? Find out more at IG Academy

Last updated : 2021-01-07T11:53:00+0000

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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