Eligible U.S. customers can now request shares at the offer price before trading begins. The stock hit a four-month high this week as bitcoin rallied at the same time.
Coinbase, the largest U.S. cryptocurrency exchange, is moving into a business that has long belonged to traditional brokerages: handing out shares in initial public offerings.
The company said eligible U.S. retail customers can now request IPO allocations at the offer price, before public trading begins, directly through the Coinbase app. The first deal on the platform is Oura, the maker of a wearable smart ring. Oura is expected to price its offering during the week of Sept. 28.
Once a price range is set, customers submit what Coinbase calls a "Conditional Offer to Buy." Allocations depend on demand and on how many shares the underwriters make available, so a customer may receive a full allocation, a partial one or none at all. Coinbase prioritizes long-term holders. Customers who sell within 30 days of the offering face a 60-day ban from participating in future deals. Users must also complete a FINRA eligibility questionnaire.
Orders run through Coinbase Capital Markets, a FINRA-registered broker-dealer, and clear through Apex Clearing Corporation.
Coinbase framed the launch as "the next step in growing the Everything Exchange as a trusted platform to trade any asset at any stage of its lifecycle."
The stock has moved sharply. Coinbase shares closed Tuesday at $201.05, up 3.5%, after touching $208.33 during the session. That followed an 11.7% gain on Monday and put the shares at a four-month high. Bitcoin was trading near an eight-month high over the same stretch, which gave crypto-related stocks broad support, so the stock's gains cannot be credited to the IPO launch alone.
The product fits a broader pattern at Coinbase. Its derivatives arm has filed with the Commodity Futures Trading Commission to list perpetual-style futures tied to individual U.S. stocks. IPO access and equity derivatives together push the company further into territory that has belonged to traditional brokerages and exchanges.
For Coinbase, the payoff depends on whether IPO access pulls in customers who trade stocks as well as crypto, and on the pace of the IPO market itself. That pace is uncertain. Several sponsor-backed and strategic-backed issuers have postponed or delayed listings this month, and only a fraction of recent IPO filers have made it to market.
Oura's pricing will be the first real test. The size of the allocations Coinbase customers receive, and how the shares trade after the debut, will show whether a crypto exchange can compete for retail IPO demand.