Which crypto companies will follow Coinbase, crisscross the public markets?

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Crypto firms, some of which are only a few months old, are looking to the public markets for liquidity. At this point, everyone is guessing which company will announce their intention to sign up next.

The number of announcements accelerated after the largest US exchange, Coinbase, went public via a direct listing in April.

Crypto lender BlockFi, cross-border payments network Ripple, and crypto exchange Kraken are all planning to go public.

The Apifiny crypto exchange, the Bakkt bitcoin futures exchange, the SoFi lending fintech, and the eToro cryptocurrency trading platform are scheduled to go public.

And the Circle stablecoin issuer and the Peter Thiel Bullish backed crypto exchange both have Special Purpose Acquisition Company (SPAC) agreements ongoing.

Trades

The most likely suspects of a new public listing are crypto exchanges that could rival Coinbase Gemini, Blockchain.com and FTX, Oppenheimer analyst Owen Lau said.

Fees on exchanges are still very high and crypto exchanges have yet to experience a race to zero, and every business in the crypto space relies on crypto price data exchanges.

The heart of the capital markets system is exchange, Lau said.

The initial public offering allows the first investors of a company to cash in. It also gives companies the validation of publicly available financial data, allows them to issue additional shares to acquire other companies and gives them a global boost to their brands, Lau added.

Conformity

Other companies that would be able to go public would be those that can serve clients outside the crypto space, such as blockchain investigation firm Chainalysis and digital securities firm Securitize, Lau added.

“These are the black horses I would think of,” Lau said.

Mining

The other crypto vertical that could see more public releases is crypto mining, said Dan Dolev, analyst at Mizuho Securities.

Following in the footsteps of Riot Blockchain, Hive Blockchain and Marathon Patent Group, these public offerings would include US-based mining companies and see an opportunity to take over following the ban on crypto mining in China or allay environmental concerns.

It’s almost better to do this when bitcoin is at $ 30,000 rather than when it was $ 60,000 because you have a 50-50 chance that it will go up or down, Dolev said. Because stocks trade on what is going to happen and not on what has happened in the past.

Keep

Crypto security companies that offer multi-party custody and compute (MPC) are another key piece of infrastructure that may seek to be acquired by larger companies (such as PayPal’s purchase of Curv) or become public via a SPAC, Dolev said.

First option for many of those businesses that need to [exit] and can’t find a good enough price will be the SPAC route, Dolev said.

Really ?

The odd part of the recent wave of announcements is that there hasn’t been a shortage of capital for crypto startups to mine in the private markets, said Lisa Ellis, analyst for brokerage firm MoffettNathanson.

IPO through a SPAC as a young crypto company raises additional questions, as being acquired by a shell company does not require these companies to file an appropriate S-1.

Crypto’s volatile business cycles are well suited for venture capitalists who expect to invest for 10 years, but public markets have a much shorter time to invest, one to three years, Ellis added.

When you go to public markets, it makes me want to ask a lot of questions, especially if they’re under 10, Ellis said. Because it can cause a lot of problems if your stock price goes down when people are bearish on the crypto.

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