Following in the footsteps of their competitor Coinbase, who has a scheduled public offering on April 14th 2021, Kraken recently confirmed its intentions to go public sometime soon.
Kraken exchange, which is currently the number four cryptocurrency exchange behind Coinbase, Binance and Huobi in terms of trading volume, was founded in 2011 and his experienced some significant growth as of late (the entire crypto market has).
Recently reporting a surge in user signups and trading volumes in Q1 of 2021, the temptations of “traditional” finance seem too much to deny for this sea monster.
According to CEO Jesse Powell, the plan is to take the company public, “sometime next year”. He was further quoted as saying they have delayed efforts as they wait and see how Coinbase’ valuation (IPO) goes (in April).
#1 What is an IPO?
An initial public offering, or IPO for short, is the process of taking a private company public by offering sale of it stock to the general public (hey, that's me!). E.g., you can own a piece of a company buy purchasing some their stock on the traditional stock market. Stock markets...yawn..
For us regular Joes, this is our first chance to invest in a company if we believe the company to be worth our efforts and cash.
Generally, when a company goes public, it will put a date on the calendar well in advance to give potential investors a chance to do their own research in preparation. Once the stock is public, the gloves are off and the price of the stock is subject to normal market forces (price go up, price go down).
#2 Kraken Exchange VS the Public
Although Kraken was founded in 2011, the exchange didn't launch until 2014, joining other major players like Coinbase as a big box company, and way to buy and sell cryptocurrencies in the U.S. and other countries.
More recently, in 2019, Kraken raised an addition 100 million in funding at a then listed valuation of four billion dollars. Whew!
According to Wikipedia, Kraken was the first crypto exchange to receive a SDPI banking license in Wyoming. Ooh, that sounds fancy!
Unlike many exchanges, Kraken has never suffered a hack or loss of funds and is currently sporting an 8.4 exchange rating score on CoinMarketCap.
#3 We all gettin’ IPOs!
Coinbase appears to have broken the seal when it comes to taking a private cryptocurrency exchange public.
For some background info, typically the sentiment in the cryptocurrency world is that the less regulation the better. Crypto-truists think the less information collected about themselves when trading crypto the better. Things like "Know Your Customer" and tax reporting seem to go against those libertarian -esq values.
Going public will surely lead to more regulations as companies financials and tax reporting will be on display and audited with more scrutiny.
We see the both sides of the argument, but can't personally see how going public could possibly be a value-add for the end user like us. (Womp Womp)
First Coinbase, now Kraken and it was recently reported that the Wiklevoss twins may be eying a public listing for their crypto exchange, Gemini. By the end of next year ever major exchange may be cashing in on the IPO craze. (Starting to feel like the tech bubble all over again, eh?). You don't put that evil on crypto, Ricky Bobby!
#4 Calling in the bulls
Unless you have been living under a rock, you are no stranger to cryptocurrencies explosion in 2021. The entire cryptocurrency market recently surpasses two trillion market value for the first time in history and you can bet your bottom coin that Kraken is hoping the bull run lasts right up until their public offering.
Let's hope for their sake that the bears don't wake up from hibernation right before their IPO, that'd be a real shame, huh?