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Kraken, Blockchain, Gemini—Coinbase listing paves way for crypto IPOs

April 24, 2021, 1:30 PM UTC

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The recent big debut of Coinbase has market-watchers avidly speculating about which cryptocurrency-related companies might go public next.

The U.S. cryptocurrency exchange’s direct listing offers something of a test case for peers waiting in the wings. Santosh Rao, head of research at Manhattan Venture Partners, a merchant bank that was an early investor in Coinbase, says the company’s stock debut provides a “template that other companies will follow.”

“I think you will see a lot more activity in the crypto space in terms of companies going public, use cases, regulators warming up to it,” Rao tells Fortune. But for that to shake out, “it all depends on Bitcoin, how Bitcoin is doing, and how the regulatory landscape is shaping up.”

In the lead-up to Coinbase’s listing, Bitcoin’s market value skyrocketed to new heights above $60,000—perfect conditions for its share sales. Since then, the price of the cryptocurrency has slid back near $50,000.

For many crypto companies, the decision to take the public plunge will depend on the whims of a manic market; some may seize the moment, others may sit tight. Whichever way they lean, here are the IPO candidates likeliest to be next out the gate.

Kraken

San Francisco-based Kraken is the world’s fourth largest cryptocurrency exchange by trading volume, per industry-tracker CoinMarketCap.

In April, Jesse Powell, Kraken’s chief executive and cofounder, told CNBC that the company was considering going public in 2022 “probably” through a direct listing. Unlike a traditional IPO, a direct listing doesn’t raise additional capital or issue new shares, and doesn’t use an underwriter.

Ahead of its prospective listing, Kraken is reportedly seeking to raise funding that could privately value the firm at as much as $20 billion. Manhattan Venture Partners’ Rao thinks a company like Kraken is an obvious candidate to follow Coinbase. “It’s very likely another exchange will go public, because it looks like the market is accepting exchanges,” he says.

Blockchain.com

Blockchain.com is a London-based firm that helps people and bigger institutional investors store, use, and buy cryptocurrencies, like Bitcoin and Ethereum. The company raised a couple recent rounds of funding, the latest one lending it a private valuation of $5.2 billion in March, per PitchBook data.

Like Kraken, Blockchain.com is reportedly mulling a public debut. Peter Smith, the company’s CEO and cofounder, recently told Barrons it was “carefully considering its public-market options.” The timeline for a debut, however, isn’t clear, and Smith told Barrons the company was “not in a rush.”

Bakkt

Bakkt, a rewards and loyalty points-focused crypto platform, is owned by Intercontinental Exchange, making it a corporate sibling of the New York Stock Exchange. The company announced in January that it agreed to go public via a merger with a SPAC, or “special purpose acquisition company.” The tie-up target is VPC Impact Acquisition Holdings. The duo’s deal, which notches a roughly $2.1 billion valuation, hasn’t closed yet, but the company said it expects the merger to be completed in the second quarter of 2021.

eToro

Adding to the SPAC stack is Israel-based brokerage platform eToro. The company announced in March it would go public via FinTech Acquisition Corp V, a so-called blank check firm backed by Betsy Cohen, founder of the dot-com-era Bancorp virtual bank. The terms include an investment from SoftBank, and they value the combined entity at $10.4 billion. The deal is expected to close in the third quarter of 2021, the company says.

BlockFi

The New Jersey-based crypto-lending firm is considering going public later in 2021, per a July report from The Block. The company lets users earn high interest rates by lending out their cryptocurrency holdings, among other services. Thanks to a $350 million funding round in March, BlockFi is currently valued at $3 billion, according to PitchBook.

Gemini

The Winklevoss twins could soon bring their digital asset exchange to the public markets. The duo, Cameron and Tyler, hinted early in 2021 that they were “considering” taking Gemini public, per Bloomberg. The brothers said they were “having internal discussions on whether it makes sense for us at this point in time,” noting they were “certainly open to it.”

Manhattan Venture Partners’ Rao says that in general, companies’ prospects will hinge on big-time investors’ sustained appetite for cryptocurrency. He says the virtual asset class needs to keep maturing and developing new uses, like “day to day” transactions in addition to trading.

“For Bitcoin to really hold up, or any new company to really do well, you need these institutions to come in,” Rao says, referring to Wall Street writ large. But for every Square or Tesla that gets behind Bitcoin, there are other big firms, like brokerage Charles Schwab, hesitant to take a leap.

Either way, with several startups pondering a debut, Coinbase likely won’t be alone for long.