Over the past 15 years, while the crypto industry has flourished, the number of public companies has been relatively scarce. However, as the crypto market rebounds against the backdrop of a stronger economy, investment funds and potential IPOs in the blockchain space appear to be on track to turn around this year.
Goldman Sachs predicts that IPO activity will be more active in the second half of 2024, especially if the Federal Reserve cuts interest rates, which will reduce transaction costs and stimulate the economy. While there are many potential obstacles, including the US presidential election, congressional infighting, war and inflation, public offerings tend to be frequent when financial markets are strong, and it is becoming increasingly clear that the crypto market is getting stronger.
Now, stablecoin issuer Circle plans to go public again and has submitted confidential documents to the U.S. SEC. Previously, in 2021, Circle planned to merge with a SPAC company and list on the New York Stock Exchange, but it ended in failure.
SPAC is commonly known as a "blank check company". In essence, it is like a listed private equity fund. The sponsor first sets up a company, submits a prospectus for the initial public offering, goes public through IPO financing, and then finds a target company to complete the acquisition within 12 to 24 months. Most SPACs are listed on the Nasdaq, and some are listed on the New York Stock Exchange.
Currently in the crypto field, there are more than a dozen "unicorn" companies with a valuation of more than $1 billion. Companies such as Kraken, Anchorage, BitGo and Paxos have strong market adaptability and growth potential and are the most likely candidates for IPOs.
Last November, Kraken CEO Dave Ripley said he was considering going public. The company had previously taken initial steps by filing an application with the U.S. SEC for review. But a year later, the SEC did not declare Kraken a valid candidate.
What is unfavorable to Kraken now is the lawsuit filed by the US SEC last year, accusing Kraken of being an unregistered brokerage institution. In this case, Kraken has no choice but to go public. It is worth noting that several other exchanges and brokerages, including Israel's eToro and CoinDesk's parent company Bullish, have tried to go public, but were rejected by the US SEC. If the vision is expanded beyond the US market, Bitpanda in the European Union and Bitso in Mexico should also be paid attention to.
In the crypto custody space, rivals Anchorage and BitGo may also be exploring public listings. Both are leading companies in the custody space and have expanded beyond custody to include other security services as well as the hot area of ââtokenization.
The third largest stablecoin issuer, Paxos, may also apply for listing. Paxos is the issuer of choice for third parties seeking to create branded stablecoins. For example, Paxos is the issuer of PayPalâs recently launched PYUSD token and Binanceâs BUSD (discontinued). Stablecoins have become one of the clearest uses of blockchain.
Not only that, there are many other companies and emerging tracks in the crypto space. Several large and long-established blockchain hardware companies, including Ledger and Trezor, payment technology companies Ripple and BitPay, and financial service providers such as Bitwise, may be considering IPOs. It is worth mentioning that FTX may also try to go public if someone provides funding.
However, crypto companies still face challenges and uncertainties in going public. In addition to political and regulatory factors, efficient corporate governance, market adaptability and growth potential are also key factors in whether a company can be successfully listed. Crypto companies need to consider various factors comprehensively and formulate a listing strategy suitable for their own development.
Summarize
As the crypto market recovers and the investment environment improves, more and more crypto companies will explore the possibility of going public. However, going public still faces challenges and uncertainties, requiring crypto companies to comprehensively consider various factors and formulate a listing strategy suitable for their own development. The listing boom in the crypto industry may become a new milestone and promote the further development of the crypto economy. However, for now, all this may depend on how Circle's IPO progresses. If it goes well, many other companies may try it.
