The digital currency exchange Coinbase has approached Goldman Sachs, hoping that Goldman Sachs will lead its upcoming initial public offering (IPO), which may enhance the attractiveness of cryptocurrencies to a wider mainstream audience.
According to Business Insider on Friday, citing two people familiar with the matter, Coinbase is seeking Goldman Sachs to lead its IPO, but more details are not yet known.
For many years, Coinbase has been in contact with Goldman Sachs through its co-founder Fred Ehrsam, who worked as a trader at Goldman Sachs. According to Business Insider reports, Ehrsam worked at Goldman Sachs from 2010 to 2012, then resigned and founded Coinbase with the current CEO of the exchange, Brian Armstrong.
Ehrsam left Coinbase in 2017, but the exchange still retains his board of directors.
The day before the report came out, Coinbase confirmed its listing plan in the draft registration submitted to the US Securities and Exchange Commission (SEC). According to the latest valuation in 2018, Coinbase has a market value of $8 billion. Encrypted data analysis company Messari said that the valuation of Coinbase after listing may reach 28 billion US dollars.
Coinbase is the preferred exchange for many newcomers in the digital currency field. Since this spring, the platform has also received billions of dollars in institutional capital, which roughly coincides with the arrival of so-called savvy investors.
So far, institutional investors may have been the main catalyst behind the record-breaking rise of Bitcoin (BTC). This Thursday, the price of this top cryptocurrency soared to $24,000, another record high.
As the market value of cryptocurrencies rose to the highest level since the beginning of 2018, Coinbase launched an IPO at the right time for market development. Rumors of Coinbase’s public listing have been circulating for some time, but the exchange did not formally finalize its plan until this week.
Like other financial institutions, Goldman Sachs is much more open about cryptocurrency than it was a few years ago. The company recently appointed a global head of digital assets and plans to use the real-time intraday repurchase agreement of the JPMorgan Chase blockchain.
This Friday, the investment bank told clients that under the same macro hedging strategy, Bitcoin and gold can coexist. Although the bank stated that Bitcoin’s popularity does not “pose an existential threat to gold’s status as the ultimate currency,” it acknowledged that “some alternative currencies to gold are emerging”.
