Ahead of IPO, Coinbase Files Document Revealing Bitcoin & Ethereum Price Risks

Author: Sohrab Khawas

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    The largest cryptocurrency exchange Coinbase ahead of its long-awaited Initial Public Offering has filed a document revealing the price risks of two prominent cryptocurrencies Bitcoin and Ethereum, whose trading generates the majority share of the revenue for the company.

    The release of the documents is a part of its IPO process, in which they lay out the aspects that could potentially destabilize the price of Bitcoin and Ethereum, as it will have a direct nexus to their business growth.

    The risk factors included are “disruptions, hacks, splits in the underlying network also known as forks”, ‘as well as developments in quantum computing and regulations that affect cryptocurrencies.

    The filing also mentions “the future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate”.

    The document was accompanied by a letter from the CEO of Coinbase Brian Armstrong, excerpts of which read,

    “You can expect volatility in our financials given the price cycles of the cryptocurrency industry”, This doesn’t faze us, because we’ve always taken a long-term perspective on crypto adoption”.

    Satoshi Nakamoto a potential risk?

    The filing puts through another interesting reason that is, ‘ the identification of Satoshi Nakamoto, the pseudonyms person or persons who developed Bitcoin’, as a probable risk factor, also the transfer of Nakamoto’s bitcoin said to be $30 Million worth.

    Evidently, there is a fear that Nakamoto’s identification will damage bitcoin’s decentralized nature and reputation. Although there have been various investigations to identify Nakamoto, none of them have reaped any significant results.

    The Bitcoin Volatility

    It is only sensible that Coinbase has feared the risk of changing cryptocurrency prices ahead of its IPO, the history of BTC prices in the past several years is evidence enough for how volatile the market can get and be.

    Bitcoin in the year 2017 has risen to around $20000 but subsequently came crashing down to $3000 in 2018, following further the last year itself BTC dropped under $4000 again.

    However, it further experienced a bull run from October 2020 till Mid February 2021 broadly.

    In the last month itself, bitcoin almost touched the $60000 mark with $1 Trillion+ market capitalization and eventually faced a major price correction falling down to $45000, since then it has been staggering around the $45000 – $50000 range every day.

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