After much speculation, it looks like there will be a Coinbase IPO in the not-too-distant future. But unlike previous IPOs, this announcement doesn’t carry too much excitement. In fact, experts are suggesting that this might prove to be far more risky than the company realizes at this juncture.
Let’s have a look about what we know about this potential IPO, and why it may not be the miracle the company thinks it is.
Coinbase IPO: The Road To Disaster?
So the thought of a Coinbase IPO, on the surface, seems like a promising thing.
After all, what’s not attractive about a digital currency trading platform, especially as crypto’s value soars to new heights?
But experts believe there’s more of a struggle than meets the eye.
A new book, Kings of Crypto: One Startup’s Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street, goes into extensive detail about how Coinbase struggled with internal power struggles — and though these power struggles seem to have subsided, they’re still a cause for concern as the company prepares to go from Silicon Valley to Wall Street.
“Good advice is not always heeded, and in this case the politics and power struggles went on unabated as Balaji [Srinavasian, Coinbase’s former CTO] pushed out designers and a head engineer,” the book says. “Also toppled was Mike Lempres, the veteran legal fixer who had tried to get Brian to warm to Washington, D.C. Lempres had worked at the top levels of the Justice Department and once, as a side hustle, he had served as mayor for the affluent Silicon Valley town of Atherton.
But none of this compared to what he saw at Coinbase in late 2018. “I’ve been the mayor of a California town, but I’ve never seen a place as political as Coinbase,” he said on his way out the door in the spring of 2019.”
That doesn’t bode well for a potential Coinbase IPO. In fact, volatile leadership could prove to be detrimental to a Coinbase IPO in the long run, especially since investors are gun-shy about the largely-misunderstood world of cryptocurrency.
What Should We Keep In Mind Going Forward?
Unsurprisingly, leadership continues to get shuffled around in the wake of a potential Coinbase IPO. “Coinbase has been shuffling its management team in preparation for the IPO, announcing on December 16 that Marc Andreessen, co-founder and general partner at Andreessen Horowitz, is transitioning from a board observer to a board director. This will allow Andreessen to take on a more active role as a full-time board member,” the company said to Capital.com.
But with more than $300 billion in assets traded, and more than $25 billion in assets on the platform, Coinbase can prove to be a wise investment if they ever get their leadership in order.