The Good and Bad of the Crypto Going Public
This week, big news came in the form of crypto businesses that are planning to go public either later this year or next year.
Crypto lender BlockFi is looking for a veteran financial professional (CFO) that could help the company “guide and position the finance team for late-stage investment, acquisition, and/or IPO.”
The company is looking for someone with over 15 years of experience as a corporate financial leader in public markets and financial markets. It further mentions in its job posting that the person also needs to have an IPO experience and scaling teams for SOX compliance and IPO ready.
BlockFi had a successful Q2 2020, and in the same quarter, the company hired former American express vice president, Wittney Rachlin to launch the bitcoin credit card that could come in the 4Q20.
In Q1 of this year, the company raised $30 million in a Series B funding led by Peter Thiel's Valar Ventures along with Morgan Creek Digital, Castle Island Ventures, Arrington XRP Capital.
NYSE-backed Crypto Exchange
The other company planning to go public is crypto exchange Coinbase.
For now, the company is planning to file for an IPO with the SEC but hasn’t registered with the agency yet. It is, however, actively pursuing investment banks and law firms to assist with the process. The listing could come as early as this year or next year.
Interestingly, the NYSE is one of the exchange's investors along with the likes of Y Combinator, Andreesen Horowitz, Union Square Ventures, and Tim Draper.
Coinbase was valued at about $8 billion during its last round of venture funding and had over 1000 employees and 35 million users in over 100 countries.
The good thing is they are not going the usual IPO route but DPO, which means they bypass institutions and banks and give retail the same access as everyone.
“The real irony is that, if they did a token sale, it would only be available to accredited investors,” commented analyst Ceteris Paribus.
An Opportune Time?
San Francisco-based Coinbase is a popular cryptocurrency exchange that has the highest amount of BTC balance, and no other exchange comes any close to it. It has been close to surpassing 1 million BTC in balance only to slide down after the March sell-off but remains above 900k BTC.
Founded in 2012, Coinbase has contributed a lot to the advancement of the crypto ecosystem. And the news of it going public that is taken as a bullish narrative by the market has come at a time when the market has been rallying amidst the COVID-19 pandemic.
The Fed is pumping in trillions of dollars, which is popping the prices of almost every other asset, from the share of bankrupt companies to the latest IPOs.
Lately, altcoins have also been surging, giving off the vibes of 2017, with many expecting it to be the start of an altcoin season. During the 2017 bull run, Coinbase boasted $1 billion in revenue.
But Coinbase also faces criticism in the bitcoin community for listing the “shitcoins” and not supporting projects that are bitcoin-related such as Lighting Network.
Not to forget, the tons of controversy that continue to surround Coinbase. Recently, it came under fire for selling its customer data to the IRS and DEA, the exact opposite of what bitcoin stands for — censorship-resistant.
So, it would be interesting to see how this IPO affects Coinbase and the market in terms of mainstream adoption and attracting new investors and institutions.