The 2021 Crypto Boom and Coinbase’s IPO
Back in 2021, the bull market had everyone feeling euphoric. Everywhere you looked, there were green candles, and as the icing on the cake, Coinbase, one of the best-known companies in crypto, conducted its initial public offerings (IPOs). This made Coinbase stock publicly tradable on the NASDAQ, opening the floodgates to new waves of investment.
The Next Wave of Crypto IPOs
Well, nobody is paying attention right now, but it looks like the next wave of crypto IPOs is about to hit us. Crypto companies everywhere are gearing up to go public thanks to a much friendlier SEC. Today, we’ll tell you about five possible crypto IPOs to watch out for over the next year or so and which cryptos could benefit if they’re approved.
Disclaimer: Not Financial Advice
My name is Guy. Stay tuned! Now, before we begin, you should know that I’m not a financial adviser, and nothing in this video is financial advice. This is purely educational content meant to guide you on your own crypto quest. So with that out of the way, let’s begin with some context.
Understanding IPOs and ICOs
What is an IPO?
An initial public offering (IPO) refers to the first sale of a company’s shares to the public. In other words, it involves listing their stock on stock exchanges. IPOs are a great way for a company to raise funds to expand a business or reduce its debt. They also give investors an opportunity to support a company’s growth while making profits along the way. Usually, institutional investors get first dibs, but retail investors can still get a slice of the pie.
IPOs vs. ICOs
When it comes to crypto, however, an IPO isn’t the typical way of raising funds. Instead, crypto projects tend to use the IPO’s cousin, the ICO (Initial Coin Offering). As you can probably guess, this is a similar concept, except that instead of offering company stock, the project sells its native coin or token to its early backers.
Regulation Differences Between IPOs and ICOs
The thing that sets IPOs and ICOs apart is regulation. IPOs are heavily regulated and involve numerous stages:
- First, the company needs to create a detailed explanation of what it has to offer.
- Then, it needs to liaise with regulators and underwriters, attract the attention of potential investors, and eventually list on the stock exchange.
For an ICO, however, there’s very little red tape. The lack of regulation means any crypto project can issue a white paper and then offer coins or tokens to early investors hoping to make some mad gains. This is exactly what caused the ICO boom back in 2017, which became a cesspool for scams as people invested in projects that didn’t actually exist or had no real aim or purpose. Some of them didn’t even have a real token!
Why Crypto Companies Prefer IPOs
As such, when a crypto company or crypto project wants to be taken seriously, an IPO is a much better option. So, let’s take a look at the five potential crypto IPOs that should be on your radar.
Five Potential Crypto IPOs to Watch
1. Circle
Circle is a financial services company that specializes in on-chain peer-to-peer payments. Founded in October 2013, Circle is best known as the creator and issuer of the USDC stablecoin. USDC was actually founded by Circle and Coinbase, which you’ll know is one of the largest crypto exchanges in the world.
- Regulatory Compliance: USDC was the first stablecoin to comply with the EU’s Markets in Crypto Assets (MiCA) bill, increasing its adoption in Europe and Japan.
- IPO History: Circle previously attempted to go public in 2021 but faced regulatory delays. However, in January 2024, the company filed a fresh application with the SEC.
- Potential Impact: If approved, a Circle IPO could significantly increase trust in USDC, benefiting cryptos that support USDC, including Ethereum and Solana.
2. Kraken
Kraken is one of the oldest and most respected crypto exchanges, founded in 2011 by Jesse Powell.
- Key Features: Spot trading, margin trading, futures trading, staking, and robust security measures.
- IPO Plans: Kraken has considered an IPO since 2021, following Coinbase’s footsteps. The company is preparing for a $100 million raise ahead of its IPO listing, which is expected by early 2026.
- Regulatory Challenges: The SEC previously sued Kraken, but with recent regulatory shifts, the company now has a better chance of going public.
3. Animoca Brands
Animoca Brands is a giant in blockchain gaming, NFTs, the metaverse, and venture capital investments.
- Company Background: A Hong Kong-based firm with over 540 investments in crypto projects, including The Sandbox.
- IPO Plans: Initially listed on the Australian Securities Exchange in 2015 but delisted in 2020 due to regulatory concerns. Now, it’s planning a return to the stock market, targeting Hong Kong and the Middle East.
- Potential Impact: If the IPO is successful, Animoca’s token and its portfolio of gaming projects could see significant boosts.
4. Bullish Global
Bullish Global is a relatively new crypto exchange that launched in December 2021.
- Notable Backers: Supported by major names like Mike Novogratz and Peter Thiel.
- IPO Attempts: Previously attempted a $9 billion IPO via a SPAC merger but was canceled due to market conditions. Now, it aims to go public in 2025.
- Potential Impact: A successful IPO could boost major cryptos such as BTC, ETH, and XRP due to increased institutional interest.
5. Chainalysis
Chainalysis is a leading on-chain analytics company providing data and software to government agencies, financial institutions, and businesses.
- Market Position: Used by institutions like Binance, Coinbase, and the FBI to monitor blockchain transactions.
- IPO Speculation: Bitwise has identified Chainalysis as a likely candidate for a 2025 IPO.
- Potential Impact: A successful IPO could indicate increased confidence in the crypto market, benefiting BTC, ETH, and privacy-focused cryptos.
What Crypto IPOs Mean for the Market
Institutional Adoption
The influx of crypto IPOs will likely attract institutional investors, legitimizing the industry further.
Regulatory Environment
The SEC is becoming more crypto-friendly, creating a fairer regulatory framework that will allow legitimate projects to thrive while eliminating bad actors.
The Future: ICOs Over IPOs?
As more crypto companies launch IPOs, competition will increase, potentially leading to a shift where crypto projects raise capital through ICOs instead of traditional IPOs, offering native tokens rather than stocks.
Conclusion
These five crypto IPOs are just the beginning. The crypto market is evolving rapidly, and as regulatory clarity improves, we can expect more companies to follow suit. Stay tuned, and watch this space!
