Crypto firms such as Coinbase, eToro, MicroBT, Bitmain Technologies, Bakkt, Gemini Trust Co and Bitfury are among those planning to go public with IPOs, according to Renaissance Capital. As the crypto market surpassed the trillion-dollar market cap in this bull run, crypto companies are ready to make their public debut this year.
Coinbase was among the first crypto firms to reveal its plans to go public with an IPO in the first quarter of 2021. Bakkt became the second major crypto company to declare that, by combining with a SPAC company followed by eToro, it would go public.
A total of eight crypto businesses have revealed their plans to be listed this year on publicly traded exchanges, and more could follow a similar suit. Over the last decade, the IPO market has proved to be an excellent game-changer for many startups and businesses. Soon after listing, their valuation went very high, the most recent example being the Airbnb IPO.
Within the industry, the crypto-entities that filed for IPOs cover a variety of services. In addition to exchanges, which have been ramping up their expansion activities, mining equipment companies are also pursuing the same pattern.
Despite the current pandemic, which affected financial growth, the 2020 IPO market was very good, hitting the highest point in years for the total amount earned.
In 2020, over 450 IPOs raised more than $156 billion. During the dot-com bubble in 2000, the last time public listings were so widespread was. However, many of these cryptocurrency companies also have good financial supporters and are well-established in the industry relative to other dot-com companies at the time.
Investors concerned about froth
Some investors are concerned as the crypto industry monitors public listings. IPOs are as chronically frothy as the blockchain, and together they can result in a bubble. There are concerns.
Crypto investor Aaron Brown observed that Crypto is chronically frothy. Chronically frothy, IPOs are. Right now, we’re in the frothy stages of both. So, this year’s Crypto IPOs? Squared-frothy!
Skew CEO Emmanuel Goh said it is clear that a gap has emerged between the valuation of the private and public sector for tech firms, leading startups to rapidly track a possible IPO. He added that there will be strong demand for bellwether crypto companies with the current appetite for cryptocurrencies that are already making a profit.
Migration to Crypto
A few of the businesses may go public, but it is striking that the interest has never been higher. There has been a visible movement of incumbent hedge funds into Crypto while some mainstream investors continue to resist cryptocurrencies.
Nearly 60% of returns since October can be explained by market exuberance and momentum trading as Bitcoin notched record after record, according to a study. Only recently, investors have made gains at amounts of $40,000.