Crypto IPOs: What to Know and Who to Watch
Like every other major industry, some of the largest cryptocurrency and blockchain-based companies have big plans to go public and raise additional capital from institutional and retail investors alike. Probably the most notable upcoming IPO is Coinbase, which is expected to open the doors for other companies to follow assuming all goes as expected. One could argue the timing for crypto IPOs has never been better as institutional investors flood the market and bring an additional element of legitimacy for traditional investors.
When thinking about IPOs in the industry, it is important to recognize companies that are well poised to gain critical market share and eventually go public. These include exchanges, protocols, hardware providers, and even DeFi applications. This list highlights companies that are in a strong position to eventually IPO based on their roadmap, traction, and focus in the market.
As one of the leading cryptocurrency exchanges globally and the top in the US by daily trading volume, Coinbase will be the largest cryptocurrency firm to hold an initial public offering to date. With over 35 million users and an $8 billion valuation as of 2018 (which will inevitably be much higher as the company and cryptocurrency ecosystem as a whole have subsequently grown), Coinbase has a lot of potential investors interested in its IPO. An additional aspect sometimes considered rare amongst unicorn companies is that Coinbase has been profitable for years now, something large companies can struggle with as they try to increase their growth and underlying valuation rapidly. Coinbase plans to launch its IPO this year.
Asia is one of the most important markets for the cryptocurrency space, and having a regulated exchange is essential to inspire investor confidence. Headquartered out of Singapore, Finxflo is a hybrid liquidity aggregator that has the ability to offer the best rates from both centralized and decentralized exchanges to its users. Using just one protocol and a single KYC process, Finxflo users get access to cryptocurrency liquidity across the entire market, with low fees and over 25 exchanges and liquidity providers, aggregated for trading rates. Finxflo has already sold out its private sale and has a high potential for an IPO in the future as it is the first liquidity aggregator offering both institutional and retail functionality.
Blockfi is a three-in-one hybrid platform (with more product offerings coming in the future) that allows its users to trade cryptocurrencies, receive crypto-based loans, and earn interest on their crypto deposits similar to a bank account. A few platforms compete in this sector, such as Celsius and Crypto.com, but Blockfi is one of the most successful. It seems that Blockfi is prepping for an ICO, which would make it the first among these multi-product crypto platforms to do so, as the company has been actively looking for an experienced Chief Financial Officer (CFO) able to guide them through the process. If this IPO takes place, expect strong demand from retail and institutional investors.
Bitmain, one of the largest cryptocurrency mining firms in the world, is rumored to be preparing for an IPO – although the current status of its long-awaited public sale is unknown. Bitmain produces novel chips for mining equipment to be sold to customers and also utilizes its own equipment in cryptocurrency mining farm operations, allowing it to capitalize on a vertically integrated business model. It’s been reported that Bitmain is looking to raise a whopping $18 billion in funds from public investors, giving Bitmain a valuation of around $40 to $50 billion. Previously, Bitmain raised $450 million from a private funding round at a valuation of $12 billion in June of 2020; the growth in the cryptocurrency market has no doubt contributed to its huge valuation.
Bakkt is the latest cryptocurrency exchange looking to go public. Founded in 2018 by Intercontinental Exchange Inc, a company with a $66.15 billion market cap and the owners of the New York Stock Exchange, Bakkt was created to facilitate the tracking, spending, and sales of cryptocurrency in a fully regulated manner. Bakkt also works to facilitate the integration of cryptocurrency payments and loyalty programs for multinational businesses, with large companies such as Starbucks already integrating Bakkt-based payment methods. It’s no surprise that the owners of the New York Stock Exchange would want to take their cryptocurrency firm public, and with a $2.1 billion valuation, it will generate a lot of interest both from the cryptocurrency and traditional finance space.
These aren’t the only cryptocurrency firms that have plans to go public, with other mining companies and exchanges likely to follow suit. As cryptocurrency investing continues to become more mainstream, the ability to own and trade crypto-based firms on the public market should add an additional level of legitimacy to the ecosystem, allowing some of the most prominent investors in the world access to this new and emerging asset class.
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