Exploring the Emerging Trend of Crypto IPOs
The burgeoning interest in digital assets is reshaping the financial landscape, sparking a surge in successful cryptocurrency initial public offerings (IPOs). This growing trend is underscored by three significant debuts poised to make waves in the market. Fueled by the remarkable performance of recent entrants, this movement is gaining momentum.
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The Rise of Crypto IPOs
In recent times, notable players like Circle (CRCL), the issuer of the USDC stablecoin, and Bullish (BLSH), a cryptocurrency exchange supported by Peter Thiel, have witnessed substantial demand, resulting in impressive stock price increases. This resurgence follows the earlier triumphs of Coinbase (COIN) and Robinhood (HOOD), whose shares have surged by nearly 500% and 60%, respectively, over the past year.
The recent market rally, which propelled Bitcoin (BTC) to a new record high exceeding $124,000, has intensified the urgency among crypto and fintech operators. As reported by The Street, this has created a palpable fear of missing out (FOMO) within the sector. The heightened interest is also bolstered by supportive pro-crypto policies from the US government, aiming to position the country as a global leader in the crypto arena. As a result, numerous companies are now vying for a spot on Wall Street.
Key Players: Grayscale, Gemini, and BitGo
Leading this wave is Grayscale, a prominent asset manager and crypto exchange-traded fund (ETF) issuer. Known for facilitating mainstream crypto investments through its Grayscale Bitcoin Trust and Grayscale Ethereum Trust, the firm manages assets exceeding $33 billion. Grayscale has confidentially filed for an IPO, marking a pivotal move in its journey within the digital asset sector.
Another notable contender is Gemini, the cryptocurrency exchange founded by the Winklevoss twins. After years of striving to launch a Bitcoin fund, the twins shifted focus to establishing their exchange, which has become one of the industry’s largest. With the growing demand for cryptocurrencies, Gemini is capitalizing on its market position by filing for an IPO, aiming to reflect its $7.1 billion valuation achieved during a 2021 funding round.
BitGo, a significant player in crypto custody, is also preparing to go public. With over $100 billion in assets under custody, BitGo has established itself as a crucial service provider for exchanges, asset managers, and businesses, offering services such as staking and trading. The firm’s substantial asset growth indicates its readiness for a larger market presence, with more details expected to emerge after its confidential IPO filing becomes public.
The success of Circle and Bullish in recent IPOs highlights the potential of crypto ventures. Both companies saw their stock prices surge upon debut, with Bullish’s shares opening at $90—a 143% increase from its IPO price—and Circle’s shares launching at $69, reflecting a 168% rise from its initial offering of $31.
However, it’s essential to note that Circle’s stock has since experienced a significant decline, dropping over 50% to its current valuation of $147, down from a peak of $298 reached in June. Conversely, BLSH trades at $64, representing a 45% drop from its record high of $117.
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