Coinbase is listing for US$100 billion on NASDAQ, but you might be better buying bitcoin instead

Coinbase, the San Francisco-based cryptocurrency exchange, is going public on April 14. The company will trade under the ticker COIN and list 114,850,769 shares on the NASDAQ with an initial valuation of US$100 billion (£73 billion).

Instead of following the traditional initial public offering (IPO) route, Coinbase plans to post its shares straight on the NASDAQ exchange via a direct listing, a technique pioneered by big names like Spotify and Palantir in recent years. Whereas an IPO involves a company creating new shares and having an underwriter that buys them for a set price and then sells them to the market, in a direct listing a company sells existing shares and has no underwriter.

But what is Coinbase and why is this such as important development in the cryptocurrency market?

The Coinbase business model

Coinbase was founded in 2012 by Brian Armstrong, a former engineer at Airbnb, and Fred Ehrsam, who was a trader at Goldman Sachs. Their mission was to make investing and transacting in cryptocurrencies easier, more efficient and fairer.

The company has since risen to become the largest cryptocurrency exchange in the US. Even though there are numerous other exchanges around the world with considerably larger trading volumes, including Binance, Huobi and OKEx, Coinbase’s growth has been incredible lately..