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According to a confidential document submitted to the U.S. SEC, the stablecoin USDC issuer Circle, based in the United States, is preparing to go public once again. Previously, in 2021, Circle planned to merge with a SPAC company and list on the New York Stock Exchange, but the attempt ended in failure.
(Explanation: In the United States, besides the traditional IPO, companies can go public through a Special Purpose Acquisition Company, commonly known as SPAC. A SPAC is essentially a blank-check company that conducts an initial public offering (IPO) to raise funds for the purpose of acquiring an existing company within a specified timeframe, usually 12 to 24 months.)
With the rebound in the crypto market against the backdrop of economic strength, both investment funds and potential IPOs in the blockchain sector seem to have a chance to turn around this year. Although the crypto industry has been around for 15 years, very few companies have gone public.
In December of last year, Goldman Sachs predicted that IPO activity would become more active in the second half of 2024, especially if the Federal Reserve cuts interest rates, reducing transaction costs to stimulate the economy. Despite numerous potential obstacles, including the U.S. presidential election, congressional discord, war, and inflation, as Goldman Sachs put it, 'public offerings tend to be more frequent when financial markets are strong,' and it is becoming increasingly evident that the crypto market is strengthening.
Furthermore, with the launch of spot Bitcoin ETFs, the crypto market has become more mature. Many companies have already raised significant funds, and investors in established companies (usually with a 10-year horizon) may be seeking returns.
Additionally, due to economic uncertainty, there may be a window of opportunity for IPOs if the crypto market remains strong in the short term, before an economic downturn. A notable example is Coinbase, which, as one of the few publicly traded companies during the last bull market, went public in early 2021.
Who is most likely to IPO?
In the crypto field, there are over a dozen "unicorn" companies with valuations exceeding $1 billion, making them the most likely candidates for an IPO.
Although some companies may prefer to remain private to have greater control over the company and reduce scrutiny, in general, if a company raises external capital, investors are most likely to achieve an 'exit' in only two ways, either through an IPO or bankruptcy liquidation.
This article analyzes many of these companies to determine which ones may announce IPO plans this year. This is a representative but not exhaustive list, intended to give readers an understanding of the factors influencing IPOs. These companies may focus on exchanges, custody, and stablecoins, all of which have tremendous growth potential during the crypto rebound.
In November of last year, Kraken CEO Dave Ripley indicated that they were considering going public. The company had previously taken preliminary steps, filing an application for review with the U.S. SEC. However, a year later, the SEC has not announced Kraken as a 'effective' candidate. Nevertheless, according to The Block, since then, Kraken's executive team has included senior executives with experience in public offerings, including Chief Compliance Officer CJ Rinaldi and Chief Financial Officer Carrie Dolan. Kraken's recent valuation is close to $11 billion, and the company also has one of the most powerful legal/compliance departments in the industry, led by lawyer Marco Santori.
What is detrimental to Kraken is the lawsuit filed by the U.S. SEC last year, accusing Kraken of being an unregistered brokerage, leaving Kraken with no way out 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 also attempted to go public but were rejected by the U.S. SEC. If the scope is expanded beyond the U.S. market, Bitpanda in the EU and Bitso in Mexico should also be watched.
In the crypto custody sector, competitors Anchorage and BitGo may also be exploring going public. Both are leading companies in the custody sector, and their business scopes have expanded beyond custody to include other security services and popular areas like tokenization.
A spokesperson stated in an email, 'Anchorage Digital provides secure and reliable digital asset infrastructure services for global institutions. Our client base includes asset management companies, registered investment advisers, crypto protocols, venture capital firms, etc.,' avoiding the question of going public.
Founded in 2013, BitGo was valued at $1.75 billion in its Series C funding in 2023, a valuation that is quite low and may lead to a SPAC merger. Meanwhile, Anchorage is also a federally chartered bank, with a recent valuation of $3 billion.
Paxos, the third-largest stablecoin issuer, may also apply for an IPO. Paxos is the preferred issuer for third parties seeking to create branded stablecoins. For example, Paxos is the issuer of the PYUSD token recently launched by PayPal and Binance's BUSD (no longer in production). |
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Post time 28-1-2024 06:25:48