SEC filing

Shares in Coinbase, one of the world's largest cryptocurrency exchanges, could soon be available on NASDAQ as the company has applied for a direct listing instead of an IPO.

Coinbase's listing could take place as soon as possible, as the crypto exchange has formally applied to the US Securities and Exchange Commission (SEC) for a public offering.

Coinbase's business spans more than 100 countries, with Coinbase's digital platform services allowing it to buy, sell and store popular cryptocurrencies: Bitcoin, Ethereum, Litecoin, as well as Coinbase's own digital currency, USD Coin, which is backed by the dollar and is less volatile.

Earlier in December, Coinbase confidentially filed for an IPO with the SEC, but the company will reportedly have a direct listing instead. Coinbase shares will be traded on the Nasdaq exchange with the ticker symbol "COIN".

Interest in listing Coinbase has increased over the past year as 2020 has been a year of growth for cryptocurrencies.

Coinbase financials Thanks to a 142% increase in total cryptocurrency trading volume between 2019 and 2020, Coinbase's revenue for last year rose almost 140% to $1.28bn from $533.7m in 2019. Most of the revenue growth came from institutional investors. In recent months, large purchases of cryptocurrency as an asset to invest in or a means to save have been made by companies such as Tesla (TSLA), Square and MicroStrategy.

In addition, Coinbase reached a profit of $322.3m, after losing $30.4m in 2019.

The company said its verified users grew by 11 million to 43 million in 2020 and the number of active monthly transactions to 2.8 million.

Risks for Coinbase

"Our net profit is largely dependent on the price of crypto-assets and the volume of transactions conducted on our platform. If such price or volume declines, our business, operating results and financial condition could be adversely affected", Coinbase said in its filing with the SEC.

In addition to these risks, there are regulatory risks, as the US and other governments seek more regulation of digital platforms and warn investors that cryptocurrencies are a high-risk asset.

Countries' central banks are exploring the possibility of launching their own digital currencies.