And the hype and frenzy around the latest IPO to rock Wall Street has fueled demand for the underlying crypto-dollars themselves: Bitcoin was approaching a record $65,000 today while Etherium was up at $2356 (up from $140 last March).
Coinbase was founded by CEO Armstrong and Ehrsam back in 2012 when only a few people had heard of bitcoin.
With the nascent industry a wild-west of garage start-ups run by enthusiasts and amateurs they distinguished the operation by making regulatory compliance the foundation stone of the operation.
The trust thus engendered proved critical despite bumps along the way.
User numbers have risen and fallen with the often wildly fluctuating crypto market and it has weathered a series of controversies over system outages, claims over inaccuracies in its trading data and the defection of a third of its workforce during the ‘cryptowinter’ after 2017’s bitcoin crash.
But the company has rallied alongside the latest bitcoin boom - which has seen the digital currency rise from around $20,000 to upwards of $60,000 since December.
There were 43 million verified Coinbase users in 2020, with 2.8 million making transactions monthly. Its revenue more than doubled to $1.14 billion last year and the company swung to a profit of $322.3 million after losing tens of millions in 2019.
It now expects to report a first-quarter profit of some $800million - more than double its 2020 earnings.
Armstrong’s stake was valued at $15bn on today’s pre-market price, with Ehrsam - who left the company in 2017 - owning around $2bn in stock.
Sceptics remain. Earlier this month, Isabel Schnabel of the European Central Bank told Der Spiegel that Bitcoin is a: “speculative asset without any fundamental value.”
While David Trainer, CEO of investment research firm New Constructs, said Coinbase has "little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high valuation."
But those voices are being drowned out by a growing chorus of institutional backers from Elon Musk to Morgan Stanley and Goldman Sachs, which last month said it was looking to offer a "full spectrum" of cryptocurrency investments for its private wealth clients within the next few months.
Asen Kostadinov, of London crypto custody provider Copper, said: “Arguably, this is the most important IPO in crypto to date. Coinbase is a credible, regulated, profitable blue-chip tech stock, which is also a pure-play crypto company.
“As such, it will be a likely holding for every tech investor/ETF fund and it will also be the best crypto market proxy investors have had.
"The IPO will result in new types of investors entering the crypto space, some of whom will recognise the benefit of owning crypto assets directly as opposed through a proxy.
"Institutional adoption of crypto has clearly gone through a major inflection point since the last quarter of 2020 which speaks to the maturity and credibility of the space. The growth the sector has experienced over the past year is a lot more sustainable than in 2017.
"The indicators are that this bull market has further to go and we are not at the top yet with such strong liquidity, transactions at a record high and institutions buying as much as they are."
