Kraken CEO Jesse Powell, speaking to Bloomberg, said that the exchange is preparing to go public within the next 12 to 18 months.
This would make Kraken the second U.S. exchange to go public, following Coinbase’s much-discussed direct listing earlier this year.
Kraken is one of the largest cryptocurrency exchanges in the world, with a user base of over six million and monthly trading volumes consistently exceeding $1 billion since the start of the year. The exchange has raised $118.5 million so far, all through private equity.
Kraken IPO over direct listing
Reports began to emerge in April 2021 that the San Francisco-based exchange had plans to go public. At the time, Powell told CNBC that the exchange had experienced phenomenal growth alongside the market rally. He said that this opened up the possibility to go public in 2022. Earlier this month, he said that the exchange could choose the IPO route over a direct listing.
By February 2021, it had already eclipsed its 2020’s volumes. User registrations in the first quarter of 2021 quadrupled that of the second half of 2020, while spot volumes were 1.5 times that of the whole of 2020.
In that interview with CNBC, Powell said that the executives were waiting to see what the valuation for Coinbase would be — which turned out to be over $100 billion. In his interview with Bloomberg, he seemed confident about a successful public listing, saying that they were “doing all the prep work.” The exchange has also been focusing on compliance, tightening rules for U.S. customers.
Bloomberg cites unnamed sources as saying that private funding could potentially put the valuation at above $10 billion, which could perhaps even cross $20 billion. He has high hopes for the cryptocurrency market in general and sees more upward growth, and possibly a new all-time high by the end of the year.
Crypto companies still want to go public despite market rout
The news of Kraken going public is yet another sign that the crypto market is entrenching itself in the wider financial world. Several well-known crypto firms have also been toying with the idea of going public, though few have offered any concrete statements on the matter.
With Powell now confirming the rumors of Kraken going public, it could be the start of a new wave of IPOs or direct listings. Coinbase was the first major company to do so, attracting all the headlines and bringing the market into the wider public consciousness.
The COIN stock remains quite a way down from the highs present in the early days of its listing, but analysts are fairly optimistic. It is not unusual for companies to trade lower in the months that follow a listing. However Kraken may perform, the key takeaway is that many crypto companies are now confident enough that they want to go public.