Does Coinbase’s moderate direct listing performance have emerging crypto platforms thinking twice about going public? Recent comments from major cryptocurrency exchange Kraken may indicate this.
In an interview with CNBC earlier this year, Kraken CEO Jesse Powell said that the company was considering going public with a direct listing in 2022. Coinbase went public less than a month later, and now it’s only a few months away From the debut of Wall Street, the company may have other ideas.
IPO … do not know
Kraken is one of the top 3 trading companies when Sorted by size, and continues to grow. However, Kraken’s future when it comes to public listing remains a question mark. In his recent appearance in the Fortune “Balancing The Ledger” video series, Powell stated that the company was looking more seriously at bringing it to the public, especially when it came to direct listing.
“The IPO looks much more attractive given the performance of the direct listing,” Powell said. “I would say we are looking at it more seriously now that we benefit from seeing how the Coinbase live public offering has performed.”
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Coinbase has struggled since direct listing
In just a few months, Coinbase has seen its initial value cut by nearly a third, as it went public by more than $68 billion, to the current valuation of just $48 billion. The company has been in business for nearly ten years, and still feels strong about its long-term successes. Additionally, the company is paving the way for other crypto-focused companies to follow suit. However, the company’s direct listing approach seems to make investors nervous, and to Powell’s view, it’s likely a “watch and learn” experience for some of the largest public facing crypto companies considering going public.
Since going public via direct listing in April, it's been a steady slide for Coinbase. | Source: $COIN-NASDAQ on TradingView.com
Can Kraken crack the code?
Despite the difficulties we’re seeing from Coinbase stock, buoyed by a less than stellar earnings report, CEO Brian Armstrong saw a direct listing path as appropriate. Armstrong told CNBC in April that the direct listing was “more committed to crypto ethics.”
Paul Kraken doesn’t see it the same way. “I suspect [Wall Street] Powell said in his last appearance. However, Powell has not been one way or the other when it comes to direct listing versus an IPO — but he has ruled out one of the “hot” public routes: SPACs, or special purpose buyouts. SPACs have been a growing topic and rumor mill for startups, such as the Crypto Start-up Circle.
It remains to be seen what approach Kraken and other crypto startups will take, but rest assured that they are paying close attention to market forces at work.
Related reading | Coinbase Banks on Dogecoin List to Resurrect Troubled Wealth
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