Cryptocurrency companies likely to go public this year | CoinDesk JAPAN

Circle, which issues the stablecoin USD Coin (USDC), is making another attempt at going public. This is the second challenge for the company, whose first plan to go public through a merger with a special purpose acquisition company (SPAC) in 2021 failed.

Will this be a year of increased IPO activity?

Crypto assets (virtual currencies) are on a recovery trend amid a strong economic environment, and investment funding and initial public offerings (IPOs) in the blockchain field are likely to return in 2024.

Despite being around for 15 years, there are surprisingly few listed companies in the crypto asset sector.

Goldman Sachs predicted in December that IPO activity would pick up in the second half of 2024. In particular, if the US Federal Reserve (Fed) lowers interest rates, transaction costs will fall and the economy will be stimulated.

There are many potential hurdles, including the U.S. presidential election, infighting in Congress, war and inflation, but as Goldman says, “When financial markets are strong, public offerings tend to be strong.” And it’s becoming increasingly clear that the crypto market is getting stronger.

Furthermore, with the recent launch of Bitcoin ETF (Exchange Traded Fund), crypto assets are moving into a more mature stage.

Many companies are raising large sums of money, and the venture capital firms that back traditional companies, which typically operate on a 10-year time horizon, are likely looking for returns.

Furthermore, if the crypto asset market continues to rise in the short term, there may be an opportunity for an IPO given the lingering economic uncertainty.

Coinbase, which went public directly in early 2021, is one of the few companies to go public during the last bull market, making it a prime example.

Featured “Unicorn”

In the crypto asset industry, there are more than 10 unlisted companies known as “unicorns” with valuations exceeding $1 billion (145 billion yen, equivalent to 145 yen to the dollar), making them the top candidates for an IPO.

Of course, some companies prefer to remain private, where they have a greater level of control and less scrutiny. Typically, when a company raises external capital, the most likely exit for investors is one of two: going public or going bankrupt.

CoinDesk analyzed these companies and selected those that are likely to announce plans to go public this year. This is not a complete list, just an indication of the possibilities. Listings are likely to focus on areas with significant growth potential amid the crypto recovery, such as exchanges, custody, and stablecoins.

Kraken CEO Dave Ripley said in November that the company was actively considering going public.

Kraken once took the first steps by initiating an investigation by the SEC, but a year later, the SEC did not recognize Kraken as a viable candidate. But since then, Kraken has filled its executive ranks with people with experience going public, including chief compliance officer CJ Rinaldi and chief financial officer Carrie Dolan. The Block reports.

Kraken’s latest valuation was just under $11 billion, and it has one of the strongest legal and compliance departments in the industry, led by attorney Marco Santori.

However, a factor working against Kraken is a lawsuit filed last year by the SEC, which approves its listing.

It’s worth noting that several other exchanges and brokerages have sought to go public, including Israel-based eToro and CoinDesk’s parent company Bullish, but were blocked by the SEC. If we want to expand beyond the US market, we should also pay attention to the EU’s Bitpanda and Mexico’s Bitso.

What other companies might IPO?

In the crypto asset custody space, Anchorage and BitGo also appear to be exploring listings. Both companies, considered leaders in this field, are expanding their business beyond custody, including other security services and the increasingly popular RWA (real-world asset) tokenization.

“Anchorage Digital serves institutional investors around the world with secure digital asset infrastructure. Our customers include asset managers, registered investment advisors, crypto asset protocols, venture capital firms, and more. “These include,” a company spokesperson told CoinDesk via email, declining to comment on the IPO.

BitGo was founded in 2013 and was valued at $1.75 billion in Series C funding in 2023, a modest enough valuation to allow it to merge with a SPAC. Meanwhile, Anchorage, which is also a federally chartered bank, is valued at $3 billion.

Paxos, the third-largest stablecoin issuer, is also a likely listing candidate. Paxos is the go-to company for third parties looking to issue their own branded stablecoins.

For example, the company is the issuer of PayPal’s recently launched proprietary stablecoin PYUSD and Binance’s BUSD, which is no longer being issued.

There are many other companies and emerging sectors to name. Large, long-established hardware companies such as Ledger and Trezor, payment technology companies such as Ripple and BitPay, and financial services providers such as Bitwise may be considering an IPO. There are multiple companies.

In addition to strong corporate governance, other things to look out for are market fit and growth potential.

Chainalysis has a number of government contracts and may be more likely to go public this year. It is also worth noting that the majority of existing listed companies related to crypto assets are involved in crypto asset mining. This is in part because Bitcoin (BTC) is the sector with the most predictable cash flows, despite its price fluctuations.

Finally, a revived FTX could attempt an IPO. Even if it’s just because there’s no other way to raise money.

“Honestly, it depends on how Circle’s IPO goes. Hopefully, there will probably be a number of other companies to consider,” said Anil Lulla, CEO of Delphi Digital. Anil Lulla) said.

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: Shutterstock
｜Original text: What Other Crypto Firms Could Go Public This Year