Barry Seibert, the chief executive of institutional crypto investment company Grayscale Investments and crypto advocacy association Digital Currency Group (DCC), has been sharing some of his most optimistic assessments of the crypto industry recently. Over the weekend, he shared his thoughts over a potential for growth concerning companies in the industry.
The IPO Craze
In a tweet on Saturday, Seibert predicted that this year would see some crypto companies going public.
SPAC pitches coming my way from every direction. Methinks we’re going to have some publicly traded crypto companies this year…
— Barry Silbert (@barrysilbert) July 25, 2020
He explained that several special-purpose acquisition companies (SPACs) had approached him with ideas for mergers, thus suggesting that crypto companies will soon be getting listed on stock exchanges.
SPACs are shell companies that help raise money for companies looking to offer their Initial Public Offerings (IPOs). They get cash from investors, then plow them into operating businesses. Many have hailed SPACs for their ability to expedite the listing process, and interest in the crypto space can only be a sign of a possible expansion.
The crypto industry is ripe for companies to go public. In 2020, there have been rumors about possible firms that will take the plunge. In February, Ripple Labs chief executive Brad Gralinghouse said at the World Economic Forum that his company could go public this year.
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company,” the blockchain executive said.
Garlinghouse’s comments came on the back of a stellar 2019 for Ripple Labs. The company rode on the back of several partnerships and investments to reach a $10 billion valuation at the end of the year. Many — including Garlighouse — believed that an IPO would be the next move for it.
Coinbase’s Possible Listing
There have also been rumors about a possible IPO for crypto exchange Coinbase. The San Francisco-based exchange is one of the top 3 largest in the world, with billions of dollars in daily trading volumes. As Reuters reported, the company is working towards a public debut, which could occur later this year or in the first half of 2021.
Coinbase’s plans are still fluid for now, as Reuters reported. However, it has allegedly been in talks to hire law firms and investment banks to guide it in the process. Reuters also reported that Coinbase could pursue a direct listing for its shares, instead of the traditional IPO.
A direct listing will allow the company to start trading publicly without pricing its equity through a bloc sale. They’ve become popular in recent years, as private companies are beginning to find more alternatives to the traditional IPO model. IPOs have been criticized for the propensity for stocks to be undervalued, which could cause companies to lose hundreds of millions regularly.
Whether or not any of these comes to pass, many crypto companies should consider listing their shares soon. If the industry hopes to become established, IPOs will be an additional attraction for institutional investors.