Crypto exchange Kraken is preparing to enter the stock market in 2022, a company spokesman said. Earlier, he said, the possibility of a direct listing considered rather than a public offering (IPO) or a merger with a company without assets (SPAC) to go public. However, the exchange has revisited its approach to its planned listing on the stock market. Building on the experience of competing platform Coinbase. And now the company is leaning towards a more accepted initial public offering (IPO).
Coinbase shares began trading in the stock market in April. Despite a high initial valuation, it quickly lost about a third of its value. Powell told Fortune that the volatility in Coinbase’s securities attributed to the company’s decision to go directly to a listing rather than an IPO option. In a direct listing, existing shareholders are free to dispose of them immediately. While in an IPO, the pricing process is more controlled.
“An IPO seems a little more attractive in light of the direct listing performance, Powell said. We’re now taking this scenario more seriously as we had the opportunity to look at the development of Coinbase’s direct listing”.
He made this statement in response to a question about the recent downturn in the crypto market. When Coinbase went public through a direct listing on the Nasdaq in April, Bitcoin changed hands for over $ 60,000. Then BTC twice descended to the level of 30,000. And at the time of writing the material, the leading crypto-asset is struggling to overcome 40,000.
As Fortune notes, the IPO choice will force Kraken to rely on the participation of traditional Wall Street banks. Some of which are interested in cryptocurrencies for fear of being lagged behind in technological development.
Kraken raises additional capital
Now the crypto exchange is raising funds to increase its capitalization. In early March, Kraken CEO Jesse Powell said that he saw no reason for the company to gain public status when valued below $ 10 billion – this is too little. Coinbase – a direct competitor to Kraken – has an expected valuation of $ 100 billion.
“We are now fully focused on scaling our business, assigning people to key positions and delivering the best customer experience”, said a Kraken spokesperson.
Powell confirmed that Kraken was in talks with investors for new funding. The reason for organizing a new round is to attract several strategic investors who will help the company with geographic expansion and growth. Thus, the exchange seeks to expand its reach.
Note that diversified cryptocurrency firm Kraken has a banking license from the Wyoming regulator. So, it’s one of the largest companies in the industry. The marketplace is one of the oldest in the industry. The company was incorporated in San Francisco in July 2011. As of June 18, according to CoinGecko, it ranks fourth among all crypto exchanges in terms of trading volumes ($ 913 million per day), after Binance, Coinbase and BitMart.