Crypto Companies Eye Public Listings to Gain Legitimacy
• In 2021, Coinbase became the first major crypto company to go public at a valuation of $86 billion.
• Circle, the issuer of USD Coin, announced plans in July 2021 to go public at a valuation of $4.5 billion and trade on the New York Stock Exchange.
• Crypto needs more public companies to establish legitimacy, according to our analyst Dan Ashmore.
Cryptocurrency had a momentous year in 2021. On April 14th, Coinbase, the largest cryptocurrency exchange in the United States, went public on the Nasdaq stock exchange with a market capitalization of $86 billion. This was an unprecedented event in the cryptocurrency industry, demonstrating the power of the asset class and its potential to influence the global financial system.
In the wake of Coinbase’s success, other crypto companies began to explore the possibility of going public. One such company was Circle, the issuer of USD Coin (USDC), the world’s fifth-largest cryptocurrency and the second-largest stablecoin. In July 2021, Circle announced its intention to go public on the New York Stock Exchange with a proposed valuation of $4.5 billion. The company planned to trade under the ticker symbol CRCL.
Circle’s valuation soon doubled to $9 billion, but the deal was cancelled in December. While Circle still claims that it is intent to go public in the long-term, this will depend on certain variables.
Cryptocurrency needs more public companies to demonstrate its legitimacy, according to our analyst Dan Ashmore. By having more companies list shares on the public markets, it will create an environment of transparency and accountability that is necessary for the asset class to gain mainstream acceptance. It will also provide investors with an opportunity to access the cryptocurrency market in a more direct way.
Furthermore, public companies will also be subject to greater regulatory scrutiny, which is necessary for the industry to grow and mature. The collapse of the Circle IPO is therefore indicative of the current state of the industry.
For now, the cryptocurrency industry remains in its infancy and is largely unregulated. However, with more companies going public, it will bring greater legitimacy and stability to the asset class. This is an important step for the industry and will ultimately benefit investors and consumers alike.