Coinbase to call Goldman Sachs for IPO

Digital currency exchange Coinbase has reportedly approached Goldman Sachs to lead its upcoming initial public offering – a move that could increase the appeal of cryptocurrencies to a wider audience.

Citing two sources familiar with the matter, Business Insider reported on Friday that Coinbase is turning to Goldman Sachs to manage its public deposit. No further details were provided.

Coinbase has been linked to Goldman Sachs for years through Fred Ehrsam, the co-founder of the exchange who previously worked at the bank as a trader. Business Insider reports that Ehrsam worked at Goldman between 2010 and 2012 before leaving Coinbase with current CEO Brian Armstrong.

Ehrsam left the exchange in 2017 but retains a position on the board.

The report surfaced a day after Coinbase confirmed its intention to go public in a draft registration sent to the Securities and Exchange Commission, or SEC. Based on its last valuation in 2018, Coinbase was worth $ 8 billion. Crypto analysis firm Messari says Coinbase could be valued at $ 28 billion after its public offering.

Coinbase is the preferred exchange for many newcomers to the digital currency space. The platform has also raised billions of dollars in institutional capital since the spring, which largely coincides with the arrival of the so-called smart currency.

Institutional investors have likely been the main catalyst for the record Bitcoin (BTC) rally so far. The flagship cryptocurrency catapulted to $ 24,000 on Thursday en route to new highs.

As crypto valuations hit their highest levels since early 2018, Coinbase is launching its IPO at an opportune time in market developments. Rumors of a Coinbase public offering have been circulating for some time, although the plans were never made official until this week.

Like other financial institutions, Goldman Sachs is much more open to the idea of ​​cryptocurrencies than it was a few years ago. The company recently appointed a global digital asset manager and plans to use JPMorgan’s blockchain for overnight repo deals.

The investment bank told clients on Friday that Bitcoin and gold can coexist under the same macro-hedging strategy. While the bank said Bitcoin’s popularity was not an “existential threat to gold’s status as a currency of last resort”, it did admit that there was “some substitution.”