Coinbase Puts Roughly $8 Billion Price Tag on Itself

May 2, 2018         By: Steven Anderson

There’s no doubt that when a lot of cryptocurrency investors out there think about placing some cash in crypto, one of the first stops on the path is Coinbase. It’s a big deal in cryptocurrency circles, and a recent report suggests that Coinbase is taking its own value pretty seriously, based on an acquisition offer it made to Earn.com.

The offer in question, which included shares of common stock in Coinbase, put Coinbase’s own value at around the $8 billion mark. That’s an internal estimate, but it’s also one that’s substantially higher than the last preferred valuation put out. Earn’s investors ultimately requested—and got—cash instead, but some of Earn’s management ended up going with a partial stock deal, according to the report.

Coinbase, for its part, stayed mum about the valuation, but it represents a pretty substantial surge in the company’s value. While it’s not a formal valuation—that generally comes after what’s called a 409a valuation—it’s still a clear statement about the company’s perceived value, which is pretty high after the recent gains in cryptocurrency. It’s also worth noting that the deal—particularly the parts geared toward Earn’s CEO and other top brass—involved cryptocurrency, at last report, which makes valuation a little tough as these are still quite volatile.

While Coinbase may not be worth exactly $8 billion—or it may have been at the time of the deal, but who knows what that value changed to even a couple weeks later—we know that its primary stock in trade, cryptocurrency, is so volatile that most any valuation is almost impossible. It’s almost like Schrodinger’s cat in that way; the second you try to observe the actual value, the value changes by the act of trying to observe it. With some further destabilizing elements heading to the field—institutional investment like Andreessen Horowitz planning what amounts to a “crypto fund” just one of them—Coinbase can claim just about any number with a straight face.

Still, it’s clear that Coinbase is a force to be reckoned with in a field that may be poised to gain some hefty value in the near term. Cryptocurrency could be a game changer on several fronts, and an $8 billion Coinbase may not be that out of line.