Photo: Coinbase.com

Following bitcoin’s sudden surge past the $20,000 price level, Coinbase, the largest cryptocurrency exchange in the United States, took a step closer to launching an initial public offering (IPO).

The company said on Thursday that it had sent its draft registration to the Securities and Exchange Commission (SEC) for review. 

“The Form S-1 is expected to become effective after the SEC completes its review process, subject to market and other conditions,” the firm said.

Coinbase was worth $8 billion in 2018. As it stands, the firm is one of the biggest names in crypto and has a reputation for working well with US regulators, two factors that have made Coinbase one of the frontrunners in the race for crypto’s major IPOs, Cointelegraph reported. However, the S-1 in question is confidential for the time being, so information is limited to Coinbase’s very brief announcement of the matter. 

CoinDesk’s Danny Nelson commented: “Coinbase has been the subject of IPO speculation for months. But the timing, coming just one day after bitcoin roke $20,000 for the first time ever, cannot be ignored.

“The major exchange is positioning itself as Wall Street’s most accessible bet yet on cryptocurrency. In October 2018, Coinbase was valued at $8 billion. Given the stratospheric increase in the price of bitcoin since then and the recent demand for initial public offerings, it’s expected Coinbase’s current valuation will be significantly higher.”

Warning to investors

Meanwhile, as the crypto market begins to heat up, Coinbase’s CEO has warned investors to tread carefully.

In a blog post on the company website, Brian Armstrong wrote, “We cannot emphasize enough how important it is to understand that investing in crypto is not without risk. The market can move in either direction much faster than equity markets.”