Investors always want to find the ground floor opportunity that makes them rich. Whenever a well-known, respected privately held company decides to go public, there is a frenzy of buying interest that often results in a huge spike in its stock price on the first day. As we’ve seen from glowing IPOs in 2020 Snowflake ((NYSE: SNOW) and Airbnb ((NASDAQ: ABNB)Those who are able to purchase IPO shares directly from subscribers make enormous profits. However, those looking outward have to pay premium prices in the open market to receive stocks.
A large number of companies are expected to go public in 2021, with many having already filed the required filings with the US Securities and Exchange Commission. Companies such as the delivery logistics platform Instacart, the pet dealer Petco and the pioneer of the mobile investment app Robinhood will receive a lot of attention in 2021.
But in my opinion there is one company that stands out from the rest. With its unique position in one of the hottest investment areas in the world right now – cryptocurrency – Coinbase will be the only real must-have IPO share for 2021.
How Coinbase is capitalizing on the cryptocurrency craze
Coinbase operates one of the most popular cryptocurrency exchanges in the US market. It enables people to buy and sell Bitcoin and a host of other tokens, with a simpler interface for casual investors and an overarching pro service for more advanced traders.
In addition, Coinbase offers cryptocurrency wallets for those who want to own their own cryptocurrency. With the wallets, Coinbase members can send and receive cryptocurrency between each other in a simple and secure way. The user interface is relatively easy to use and makes it easy to move crypto assets.
You don’t have to like Bitcoin to like Coinbase
When you shake your head and think that Bitcoin is the most dangerous investment ever, I get it. A lot of Smart investors have stepped into cryptocurrency in the past few months, but there is still a healthy debate going on and many see the entire crypto craze as a bubble that has to burst at some point.
But here’s the thing: you don’t have to invest in crypto to like Coinbase. I am a longtime Starbucks ((NASDAQ: SBUX) Investor, but I hate coffee. That hasn’t stopped me from making big bucks on the coffee chain giant’s stocks – and I smile every time I walk past a Starbucks coffee shop with a long line of caffeine addicts waiting to spend a few dollars on their 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 have $ 25 billion in cryptocurrency resources on the platform. In addition, Coinbase is a global company with users in more than 100 countries and over 1,000 employees.
Best of all, Coinbase charges fees for every single transaction made by its users. A spread of around 0.5% is calculated on the company’s website for buying and selling crypto assets. In addition, Coinbase charges a transaction fee of $ 0.99 to $ 2.99 for transactions up to $ 200 and a floating rate of 1.49% for purchases made through a bank account or the Coinbase wallet. A base rate of 4% applies to transactions that are not partially waived due to the payment method.
To be clear, professional traders don’t pay anywhere near these amounts, with a tiered fee structure that allows some high volume traders to buy and sell crypto with no fees. But traders who are not generating volume also play a valuable role in building liquidity for the Coinbase exchange and helping to build a leadership role in the rapidly growing business.
A silent IPO
Usually, companies that want to go public have to provide investors with extensive information at an early stage. However, Coinbase used the latest rules Companies considering an IPO can submit their draft registration statements in confidence. It did so in mid-December when Coinbase tweeted about the SEC filing.
Coinbase didn’t speculate on when it would resume its IPO, just said it expects the S-1 filing to take effect once the SEC completes its review process. It’s up to Coinbase to determine the exact timing, although some believe the company could go public as early as February.
Until the IPO documents are released, investors will not know exactly how lucrative Coinbase is. However, you can already see some things that make it look promising:
- Fee income of just a tiny fraction of $ 320 billion in crypto businesses adds up to big bucks.
- The Bitcoin boom has more investors than ever looking for ways to trade cryptocurrencies, and Coinbase has established itself as a beginner-friendly starting point.
- Coinbase’s fees are competitive with businesses and consumers alike PayPal Holdings ((NASDAQ: PYPL) and square ((NYSE: SQ).
- Coinbase’s last private funding round took place in 2018 and valued the company at $ 8 billion. It did so after Bitcoin’s first massive bull run, but after the cryptocurrency gave up much of its profits.
Keep an eye on Coinbase
It is also possible that Coinbase may choose to go public by using a direct listing instead of one Subscribed IPO. In this case, the selling shareholders can pocket more pop from day one than pass it on to the best on Wall Street.
Whether you love or hate Bitcoin, Coinbase gives you the opportunity to take advantage of it no matter what happens to the crypto prices. That will keep me watching closely how 2021 continues to see what Coinbase says in its IPO docs when they are finally released.