Kraken Bitcoin Exchange/YouTube
- California-based Kraken could go public next year after seeing an explosion in bitcoin trading volume.
- It's considering a stock market debut via a direct listing, rather than a traditional IPO.
- Coinbase is set to go public on April 14 at an expected valuation of $100 billion.
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Kraken is considering a stock market listing next year after the crypto exchange saw record bitcoin trading volume in the first quarter of 2021, CNBC reported on Thursday.
"We're looking at being able to go public sometime next year," Kraken CEO Jesse Powell told CNBC. "It would probably be a direct listing, similar to Coinbase."
Kraken saw a massive boost from bitcoin hitting an all-time high of $61,725 in mid-March, Powell said, as a number of institutional investors piled into the space. He said any volatility is good for the company, but is even better when prices are going upwards.
Four times as many users signed up to Kraken in the first quarter than did in the second half of 2020, according to CNBC. Spot transaction volumes hit a record $160 billion in the same timeframe, or about 1.5 times higher than last year.
"The first quarter just completely blew away the entirety of last year," Powell said, adding that the company beat last year's numbers by the end of February and the whole market "really just exploded." The total value of the cryptocurrency market exceeded $2 trillion this week after doubling in just two months.
Kraken is currently in talks with investors about another round of fundraising that could give it a valuation of $20 billion. The CEO said this is being delayed in order to evaluate how Coinbase's IPO performs. But they aren't in a rush to raise capital.
US rival Coinbase is set to go public on the Nasdaq next week at an expected valuation of $100 billion. The exchange reported preliminary revenues of about $1.8 billion for the first quarter and said it has 56 million verified users.
Companies that choose to go public via direct listings, like Spotify did in 2018, avoid paying hefty fees to investment banks that otherwise act as underwriters in a traditional IPO.
Instead, employees and investors convert their shares into stock that gets listed on a stock exchange. These can then be publicly purchased. Investors can then cash out without having to consider the lock-up period — the length of time after a traditional IPO during which shares cannot be sold by insiders.
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See Also:
- 15% of retail investors got their start during the pandemic, Schwab says
- Annabelle Huang has gained over 10,200% on her first ether purchase. The partner of the billion-dollar Amber Group shares how she pivoted from traditional financial services to crypto — and 2 emerging blockchain opportunities on her radar.
- The investing chief and research analyst at a $1.2 billion crypto asset manager share how DeFi is disrupting the traditional financial services industry — and break down the 10 largest assets in the space
