Coinbase, the largest cryptocurrency exchange headquartered in the United States, is about to close a USD 500 million investment deal with Tiger Global that would spike its valuation up to USD 8 billion. In the summer of 2017, prior to the major crypto rally which saw Bitcoin hit USD 20,000 in December 2017, Coinbase was valued at USD 1.5 billion. Therefore, if the deal with Tiger Global is closed, it would confirm the exchange’s valuation has more than quadrupled in a year. Coinbase already set its valuation at USD 8 billion earlier in 2018 when it tried to acquire earn.com in exchange for shares.
It is expected that USD 250 million of this investment from Tiger Global would be used to buy out other shareholders, and USD 250 million will go into Coinbase’s bank. Apparently, investors have been aggressively trying to buy shares even though they are no longer on sale, through the backdoor mechanism of privately negotiating with shareholders. Some shareholders want to sell, since the stock has certainly gone up due to the high demand for it, but Coinbase has warned shareholders not to trade stock. If this investment from Tiger Global goes through, plenty of shareholders will have a chance to cash out.
It appears conditions are optimal for a rapid expansion if this USD 500 million investment is finalized. Coinbase has recently announced that it is going to expand from listing only five major cryptocurrencies to all of the possible cryptocurrencies, and now they will have hundreds of millions of dollars to throw into the expansion effort. Coinbase still lags far behind the global crypto exchange powerhouses Huobi, OKEx, and Binance who occasionally each have trading volume in excess of USD 1 billion per day.
It appears Coinbase is gearing up for an initial public offering (IPO), where its stocks would go public and be tradeable by investors worldwide. If this IPO eventually happens, it would be a milestone for the crypto space, providing a direct way for investors to invest in the crypto exchange industry.
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