After the San Francisco-based exchange, Coinbase, announced that it was registering with the U.S. Securities and Exchange Commission (SEC) for an initial public offering (IPO), FTX Exchange CEO Sam Bankman-Fried said, that the company would launch a future ahead of an IPO. On Dec. 21, Bankman-Fried announced that the launch is now live and Coinbase futures contracts ahead of an IPO are now exchanging for $ 235 per unit.
People can take a plunge on Coinbase’s initial public offering (IPO) by leveraging Coinbase’s pre-IPO futures contracts on the crypto trading platform FTX Exchange. FTX is known for launching futures markets on interesting things like the result of the recent 2020 election and pre-IPO contracts for Airbnb.
After specifying that FTX could launch pre-IPO futures products for the Coinbase IPO, the CEO of FTX Exchange, Sam Bankman-Fried, announced the launch on Twitter.
“Okay, guys we did that,” Bankman-Fried tweets. “With a spot margin, up to 5x,” added FTX’s CEO.
According to the contract specifications, the “CB Pre-IPO Contracts” represent a futures contract with the value attached to Coinbase Inc.’s market valuation. at the end of the first trading day.
The contracts are settled through the exchange of crypto-assets and because they are futures products, CB FTC’s pre-IPO contracts have “no claim to fulfill the fundamental rights or shareholders.” Coinbase’s new FTX futures market has seen a significant amount of trade so far, holding $ 2.2 million volume in the last 24 hours.
At the time of issue, the pre-IPO Coinbase contracts are trading at $ 235 per unit against the US dollar. In addition, community members of decentralized finance (defi) have also created Coinbase’s unofficial futures IOU which was seen exchanging on decentralized (dex) exchange platforms like Uniswap and Sushiswap.
Ever since the company announced it was going public, crypto advocates have been discussing the first ever public listing for cryptocurrency exchange.
“Currently having major flashbacks to Amazon’s IPO in the 1990s, when I was a large desk-based merchant on a sales side,” one individual tweets. “Feeling very similar in many ways including industry background and public sentiment, the last of which involved a great deal of skepticism and ridicule,” he added.
There has been much speculation about the value of Coinbase after the IPO and some estimates believe it could be upwards of “$ 28 billion.” The San Francisco exchange has grown enormously with more than 35 million users in over 100 countries.
Coinbase already raised $ 500 million in equity funding from Greylock Partners, Andreessen Horowitz, MUFG, Tiger Capital Management, and more. In 2018, Coinbase raised $ 300 million in a Series E funding round and was estimated to be worth approximately $ 8 billion.
What do you think of the pre-IPO futures contracts for Coinbase’s initial public offering? Let us know what you think of this topic in the comments section below.
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