Dispatch #30: Coinbase Prepares to IPO on the Back of a Massive Quarter

In this patch of your weekly Dispatch:

• Coinbase’s IPO is imminent
• ETH tests the air above $2,000 for the second time
• FTX officially buys the naming rights for the Miami Heat stadium

The Big Idea

Coinbase IPO Coming April 14

After a ton of anticipation, we finally have a date for the Coinbase IPO. It’s coming to NASDAQ on Wednesday April 14th.

Now, when Coinbase decided to delay their IPO till Q2 2021, many assumed the reason was that they wanted to show off Q1 numbers first. My GOODNESS did that strategy pay off.

Reflecting the huge bull swing in the markets, Coinbase had an absolutely monster quarter. $335B in trading volume (compared to $193B for all of 2020). 56M verified accounts. $223B in total assets (of which $122B are from institutions).

Perhaps biggest of all, they saw $1.8B in revenue. Last year, revenue for the whole year was $1.3B.

In the wake of the disclosures, Wall Street analysts upgraded their price targets for ‘COIN’. For DA Davidson, it was a jump from $195/share to $440. That’s an implied valuation of $144B!

With all that money, it’s not crazy to think that Coinbase might go on an acquisition spree. A recent webinar by The Block suggested Nexo as an acquisition target, but so it’s on the record – we’re not for sale. :)

All in all, April is shaping up to be a hell of a month for the industry.

The Latest In…

Ethereum

In a young industry like crypto, psychological barriers matter. For years, Bitcoiners looked to the vaunted $20,000 as the true expression of a return to a bull market. For much of this year, the Ethereum community has wondered when their beloved ETH was going to finally crest $2,000. Early this week that barrier was breached and ETH has spent most of the week in that rarified air after hitting an ATH. With so much going on in DeFi, NFTs and beyond, it’s hard not to feel like these days will be fleeting (in a good way).

The Latest In…

NFTs

Speaking of NFTs, while prices and trading volumes are down relative to where they were a few weeks ago, there is no stopping the onslaught of celebrity engagement in this domain. For example, CNN reported this week that Tom Brady is launching a 360-degree NFT platform that enables the creation, marketing, purchase, and exchange of NFTs. The platform will be called Autograph. Supply-demand imbalance be damned, these things are coming! And if you’ve been asking yourself whether the next Googles and Amazons could emerge from this craze, read Antoni’s commentary below.

The Latest In…

Regulation and Governments

It was a quietly big week on the crypto and regulation front. JP Morgan Chase CEO Jamie Dimon included in his annual letter that crypto regulation was a major concern. A group of organizations including Fidelity, Square, and Coinbase created a new lobbying organization called the Crypto Council. Finally, beleaguered former BitMEX CEO Arthur Hayes turned himself into Federal authorities.

The Latest In…

Exchanges, but Really Mainstreaming

Here is a wild one. The FTX exchange has purchased the naming rights of the Miami Heat’s arena. The deal was officially announced by the NBA this week. For the next 20 years or so, the Miami Heat will play at FTX Arena. The deal is a multi-hundred million dollar one and had to be approved by the county, the team and the NBA. Gotta say, it’s a great show of confidence that a big city believes in the future of crypto enough to partner with an exchange on a timeline twice as long as crypto has been around!

The Week’s Most Interesting Data Story

How Bitcoin Adoption Compares to the Internet

It has often been posited that Bitcoin is the most disruptive technology since the advent of the internet itself. Certainly, the ability to store and transfer value in a way that is permissionless and largely beyond the purview of local monetary authorities has proven itself to be a massively unique force in history. If it’s so disruptive, some critics respond, why isn’t it bigger?

If we take a direct comparison, Bitcoin today has roughly the same number of users that the internet had in 1997. That said, it’s growing more quickly. By 2025, Bitcoin is on track to have one billion users – roughly equivalent to the size of the internet in 2005. How much of what makes the internet disruptive and transformational has come after 2005? Still early, team.

Hot Topics

What the Community Is Discussing

If you thought Bitcoiners had perfected the art of the triumphal tweet, get a load of ETH at $2,000 folks!

There was a TON of debate about Peter Thiel’s comments that China could be using Bitcoin as a financial weapon. Some argued that he meant the US should regulate crypto more, while others said that he was urging the US to not cede Bitcoin to China. Our favorite interpretation is in the Tweet below. What do you think?

A key macro theme of the last month or two: outflows from gold and inflows to BTC. Look for this to do nothing but continue if a Bitcoin ETF is approved!

Our Take

@AntoniNexo This Week

• In his gazillionth Bloomberg interview, Antoni took the baton from Mike Novogratz and graced us with another one of his crystal-ball predictions. This time around, it wasn’t about the price of Bitcoin but rather about how many companies are going to follow in Elon Musk’s footsteps and allocate parts of their treasury to BTC. In Antoni’s opinion, it’s going to be at least 5-10% of S&P 500 companies by the end of 2021.
• Asked about the diminishing prices of NFTs, our co-founder noted: “If there’s anything akin to a bubble in crypto, it would be within the NFT space, although a scenario in which the next Googles and Amazons emerge from the ashes of a bursting bubble is possible, much like in the aftermath of the Dot-com boom.”
• And your regular Antoni BTC price prediction, featured in this Cointelegraph article: “Any bumps in the road in 2021 won’t send BTC down significantly – it will keep boomeranging its way back up to the next price stop, and I’d put that at about $75K, not least because the market likes round numbers. We’ll be expecting six figures after that.”
• Liked our custody and insurance explainer so much that you want more? Get the lowdown on our security in this Visionary Finance piece, where Antoni reiterates just how impenetrable our infrastructure is: “Nexo’s security system is such that we have, to date, never suffered a hack… Nexo has never suffered a major bug in our near-three years of existence which is an attestation to the stability of our automated platform.”

What to Watch for Next Week:

• Will Peter Thiel clarify his comments?
• Will Bitcoin punch through $60,000 again?
• Will the Coinbase IPO land a valuation above $100B?