In late spring April, a piece of news smashed the front pages of major news around the world: the token trading platform Coinbase was officially listed on NASDAQ.
As one of the most influential token trading platforms, the listing of Coinbase on the US stock market is a milestone for the entire encryption market.
Even under such a grand appearance, Coinbase's stock price has been falling since its listing, and has now fallen to $224.63. Compared with the $429.54 on the first day of listing, Coinbase's stock price has suffered a halved loss.
All this can not help but make people think: what caused such a situation?
secondary title
success lies in tossing
Post-80s Brian grew up in San Jose, California, the "heart of Silicon Valley".
This land of high-tech companies seems to have the magic of breeding geniuses. In high school, Brian has been able to use languages such as Java and CSS to develop. In the process of learning and practicing, Brian started building websites for some shops in the small town. At this time, he never thought that his fate with computer technology would help him become one of the world's top rich people in the future.
After entering the university, Brian began to show his amazing talent and strength in the direction of computer and finance. He has successively worked in companies such as IBM, Deloitte and Touche, and co-developed UniversityTutor with John Nelson in his junior year, a service website that helps teachers and students freely choose tutoring or teaching outside the classroom.
This Internet education company founded by Brian and served as CEO has accumulated rich experience for him. At the same time as starting a business, my studies have not fallen behind.
In 8 years, Brian earned a BA in economics and a master's in computer science from Rice University, and "took time" for a brief stint as a software engineer at Airbnb.
In 2009, Satoshi Nakamoto released the Bitcoin white paper. Brian read this world-shattering document for the first time and was impressed by the design of Bitcoin. He was keenly aware of the huge potential and entrepreneurial space of the encryption market, and found inspiration from the stock trading model, and began to conceive and develop a trading platform. With the idea that "people can trade bitcoins like online stocks in the future", a The seeds of the birth of the legend were planted here.
image description
__Brian Armstrong (right) and Fred Ehrsam (left) started Coinbase in their San Francisco apartment in 2012
secondary title
Leading the way comes from every step
If we look back at the development of Coinbase, it is not difficult to find that this company whose main business is rooted in the encryption field has integrated into the traditional financial market to the greatest extent.
At the beginning of its establishment, Coinbase entered the list of Y Combinator startup incubator projects known for its vicious investment vision. Y Combinator has invested in Dropbox, Airbnb, Reddit, Weebly and many other companies, and its screening vision for startups is evident.
In just 4 months, Coinbase was ready and began to fully face the market, providing users with bitcoin buying and selling services through bank transfer channels.
In 2013, Coinbase received $5 million in investment from Union Square Ventures (USV); in December of the same year, it received another $25 million in joint investment from USV, Ribbit Capital, and Andreessen Horowitz.
In 2015, Coinbase became the first official bitcoin trading platform in the United States with a formal license, accepting investment of 75 million US dollars from the New York Stock Exchange, Draper Fisher Jurvetson and a number of banks.
With many investments from traditional financial markets, Coinbase has expanded rapidly. According to its public data, as of 2016, Coinbase had 4.7 million users.
At that time, Coinbase had become one of the largest and most influential token trading platforms in the world. However, Brian Armstrong and Coinbase faced a survival-related choice: should they continue the compliant development route, or should they seek to maximize the number of users and benefits, and give priority to expanding the market when the relevant rules are not perfect?
Obviously, Brian chose the former.
In 2017, Coinbase obtained the BitLicense issued by the New York State DFS (Department of Financial Services), allowing it to provide token trading services in New York;
In 2018, Coinbase obtained an e-money license from the UK Financial Regulatory Authority, and was authorized to operate payment services and token cash alternative services in 23 EU countries;
In July of the same year, the US Securities Regulatory Commission approved the company to use token transactions and wallet services in the United States.
Coinbase eventually became the most compliant token trading platform in the world.
For users, if they have a choice, most people would prefer to choose a platform with "compliance" endorsement like Coinbase. As a result, the number of Coinbase users and platform transaction volume continued to grow. According to the prospectus, the platform already has over 43 million retail investors, 7,000 institutional users, and 115,000 ecosystem partners. As of the end of 2020, the transaction volume reached 193.097 billion US dollars.
Coinbase is firmly at the forefront of the encryption industry as a leader.
secondary title
The wrestling between empty singers and fans
Coinbase opened at $381 per share. But since then, the stock price has been falling, and the current stock price has fallen to 224.63 US dollars.
A large amount of assets and investments of Coinbase have been deposited in the encrypted market, and the market value of the encrypted market and Bitcoin has experienced a huge decline, which directly exacerbated the downward trend of Coinbase's stock price. Therefore, it can be said that the continuous decline of the external encryption market is the biggest incentive for Coinbase's share price to halve.
The curse of "debut is the pinnacle" has been fulfilled on Coinbase, and it has also given birth to the carnival of those who sing empty words.
The income structure is the focus of criticism from most short-speakers. Although Coinbase has developed a number of businesses such as custody, investment, and subscription, its core business is still the online transaction of tokens, and related fees and storage service fees account for 90% of its revenue.
After all, the industry threshold is not so high, and the higher the profit, the more powerful competitors will be attracted. Therefore, in the eyes of short-speakers, Coinbase's stock price will continue to fall.
Many times, the enemy isn't even outside. According to statistics from the American data analysis website GuruFocus, a number of senior Coinbase internal executives, including CEO Brian Armstrong, CFO Alesia Haas, COO Emilie Choi, CAO Jennifer Jones, etc., sold a total of 12.965 million shares in the two trading days before listing. Calculated at an average price of US$354.1, the cash out amount is close to US$4.6 billion (approximately RMB 30 billion).
There are powerful enemies outside, and "traitors" inside. David Trainer, CEO of investment research firm New Constructs, said that Coinbase's stock price may continue to fall, possibly falling to $100 or even lower.
But Coinbase fans don't think so. They only worry about missing out on the potential of Coinbase, which has built a fast-growing and already profitable business.
Among them, "Sister Wood" Cathie Wood is the leader. Many ETFs of her Ark Investment are constantly increasing their holdings of Coinbase stocks. Just on July 15, Wood bought another 69,172 shares of Coinbase worth about $15.5 million. ARKK, ARKW, and ARKF under ARK all have heavy positions in Coinbase.
Advocates have other thoughts on the high-level sell-off. They believe that Coinbase adopts a direct listing method and has not carried out an IPO, so it is a reasonable and compliant behavior for major shareholders to sell stocks at the beginning of listing. On the contrary, some media chose to report this incident one-sidedly, vaguely revealing their malice towards the encryption industry.
In any case, the Coinbase listing has far-reaching implications for the crypto industry. And Brian Armstrong's name has already been tightly bound with Coinbase.
The road to "breaking the circle" is long, and the test of the mainstream world will continue. With the tightening of global policies on the encryption industry, whether the "compliance" chosen by Coinbase is a passport or a curse, only Brian Armstrong standing in the center of the stage knows what it means.
