Coinbase is filing an IPO (initial public offering). The largest cryptocurrency exchange in the United States has decided to go public right as bitcoin is hitting a new high of roughly $22,700 at the time of writing prompted by growing institutional investor interest.
Coinbase Is Hitting the Big Time
The company has filed the appropriate paperwork with the Securities and Exchange Commission (SEC). The governing agency is now engaged in reviewing the documents to ensure all is in order before giving the company a greenlight.
All this comes on the heels of Brian Armstrong – CEO of Coinbase – expressing certain doubts over where the currency is likely to move in the coming future. While he’s noticed the solid bull run that bitcoin has been enjoying for the past several weeks, he was quick to ensure his followers that the asset is still vulnerable to outside market influences and warn them of investing all they had in the currency as a means of cashing in on the action.
In a blog post, he writes:
We believe that crypto is a truly game-changing innovation and, at Coinbase, we take a long-term view of the market. While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize how important it is to understand that investing in crypto is not without risk. For one, crypto can be a volatile asset class, often more so than the types of traditional financial instruments that most investors are used to.
He then referenced the major fall incurred by bitcoin and other forms of crypto following the 2017 bull run that saw the world’s number one digital currency by market cap reach its then all-time high of $19,000+. From there, it wasn’t long before bitcoin lost virtually all its gains, eventually shedding more than 70 percent of its value by November 2018.
While this bull run is quite different from the one of three years ago in that it is supported primarily by institutions rather than retailers, Armstrong is still telling his followers that they should never invest more than what they’re willing to lose, and that caution is always the best approach no matter how well the currency appears to be doing.
We likewise caution investors who may be focusing on short-term speculation and encourage customers to seek out resources and consult financial advisors to better understand the risks associated with investing in cryptocurrencies.
Worry, Then Praise
Despite this message of gloom and doom, Armstrong appears confident that whatever bitcoin is incurring, it’s likely the start of something big. He mentions:
For those who believe in the potential of crypto, we also all have to believe that we’re still in the very early stages and that there’s a lot more to come.