Summary: Ever since Coinbase’s listing on the NASDAQ exchange in April 2021, there has been lots of speculation about which cryptocurrency-related companies will follow their lead. Right now, the most likely candidates are Circle, BlockFi, and Bakkt, however it is likely that there will be a massive increase in the number of public crypto companies in ...
Ever since Coinbase’s listing on the NASDAQ exchange in April 2021, there has been lots of speculation about which cryptocurrency-related companies will follow their lead. Right now, the most likely candidates are Circle, BlockFi, and Bakkt, however it is likely that there will be a massive increase in the number of public crypto companies in the near future.
Almost every startup company has one goal: go public on the stock exchange and become a household name. Unfortunately, most startups never achieve this dream, however those that do are cemented as one of the strongest companies in their industry, as they have successfully garnered enough attention to be considered a legitimate investment opportunity by Wall Street.
As one could imagine, the majority of Wall Street did not view any cryptocurrency-related company as anything but a gamble up until recently. Now that Coinbase has become the first publicly-traded cryptocurrency company and has amassed a valuation of nearly $60 billion, investors are looking for the “next Coinbase” that may be going public. Luckily for them, there are several companies in the space looking to be listed on the United States stock market over the coming months and years.
Circle, the company behind the USDC stablecoin, is likely to be the second cryptocurrency company listed on the stock exchange. They plan to go public via SPAC, specifically Concord Acquisition Corp (CND), by the end of 2021. Along with creation and upkeep of the USDC stablecoin, they also offer institutional DeFi accounts, a yield service, and a payment solution interface. One of their biggest partnerships is with Visa, who has used USDC to settle a payment in a test run. Their current valuation is $4.5 billion, which seems low considering that they are in charge of the fastest-growing stablecoin with a current market capitalization of $26 billion. However, investing in Circle also carries the risk of stablecoin regulation, which could hinder Circle’s biggest product and significantly stifle their innovation.
Another company with intentions to go public in the near future is Bakkt, the cryptocurrency exchange majority-owned by the Intercontinental Exchange. In 2017, during the previous bull run, the release of Bakkt was incredibly anticipated, as it promised a derivatives platform and easy access for institutional investors. Unfortunately, when it finally released in 2019, it failed to live up to expectations, and now has little-to-no volume on its trading pairs. Since then, it has transitioned into an all-in-one crypto suite with a wallet, custody options, a payment solution, and, strangely enough, gift card management.
Bakkt is going public via SPAC, specifically VPC Impact Acquisition Holdings (VIH). After the public announcement in January 2021, the VIH price quickly shot up from a price of $10 to $20, but has since fallen to below $10, signaling that investors are no longer as excited as they once were about this company. Their current valuation is $2.1 billion.
BlockFi, the cryptocurrency finance platform whose main product is its lending service, is also rumored to want to go public within the next year or so. Their interest account, which uses an overcollateralized loan system in order to ensure fund safety, allows users to earn 7.5% on stablecoins, 4% on Bitcoin, and also supports a plethora of other assets. They are in the process of a Series E fundraising round, where they hope to raise $500 million and bring their total valuation to $5 billion. Along with lending, they also offer trading services, institutional accounts, and are planning to create a crypto credit card. As a New York-based financial company, going public is obviously one of their biggest objectives moving forward.
Another company who has expressed plans about going public is Ripple, the company behind top 5 cryptocurrency XRP. Ripple is the company in charge of spearheading adoption for the Ripple Payments network, which also utilizes the XRP coin. They have partnerships with some of the world’s largest banks, such as Bank of America, and aim to create a fast, efficient banking payment solution to rival SWIFT, which is the current cross-border bank payment tool. Ripple’s main obstacle to going public is their ongoing lawsuit with the Securities and Exchange Commission. The lawsuit claims that Ripple illegally sold XRP as an unregistered security. Right now, it appears that the case will go in Ripple’s favor, and if so, they plan to go public shortly after.
Even though the success of these individual companies is far from guaranteed, one thing is certain: the greater proliferation of cryptocurrency companies into the traditional stock market will be positive for the entire cryptocurrency market, as it further legitimizes cryptocurrencies as a new digital asset class and offers all investors exposure to the nascent technology.
By Lincoln Murr