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How you can play the crypto IPO boom
IPO momentum speeds into 2021 as cryptocurrency firms look to go public.
As cryptocurrency continues to gain traction, multiple firms prepare for their 2021 debut on the public market, including Coinbase, Gemini Trust Co. and BlockFi. But investors will need to prepare for the natural volatility that accompanies the industry if they plan to invest.
If you’re interested in riding the crypto wave, here are some companies to keep an eye on.
Coinbase runs the largest cryptocurrency exchange in the United States. Its platform allows investors to buy and sell over 30 cryptocurrencies, including Bitcoin, which cracked the $60,000 mark in March 2021. Through Coinbase, over 35 million investors across more than 100 countries have access to the crypto market. bought and sold cryptocurrencies.
In December, Coinbase submitted a confidential draft registration statement with the US Securities and Exchange Commission (SEC), indicating plans to go public. Many analysts believe it will launch in April 2021, but no firm date has been confirmed. Coinbase plans to offer 114.9 million shares in the listing and Goldman Sachs is underwriting the deal.
When Coinbase last ran a funding round, it raised more than $300 million. Private trading of the firm’s shares in March 2021 suggests a $90 billion valuation.
Cryptocurrency has become more popular in recent years as investors look to alternatives in the wake of record-low interest rates and fears of a stock market bubble.
Check out our how to buy Coinbase stock guide, which we update as soon as news breaks about a Coinbase IPO.
Gemini Trust Co
Gemini is also a cryptocurrency exchange that has been generating buzz. In an interview with Bloomberg, Gemini co-founders Cameron and Tyler Winklevoss said they were open to the idea of going public and studying the market to determine whether it’s the right time to make the move.
Gemini recently announced it has reached $10 billion worth of digital assets under custody. Gemini’s estimated annual revenue is $28 million, according to Growjo.com. This database monitors the performance of some of the fastest-growing companies.
To drive more people to its platform, Gemini recently launched its own cashback credit card, which rewards users with Bitcoin and other cryptocurrencies when they use the card to make purchases.
The Gemini platform allows people to buy, sell and hold cryptocurrencies. The company has been around since 2014.
The Israel-based brokerage firm eToro plans to go public by completing a merger with special purpose acquisition company (SPAC), FinTech V. It aims to complete this process in the second quarter of 2021, but no firm date has been set. Once the merger is complete, it will trade on the Nasdaq under a new ticker symbol. It anticipates a combined equity value of $10.4 billion upon closing the deal.
Last year, eToro attracted more than five million new users and tripled the volume of stock trading on its platform. As of March 2021, the platform has over 20 million users across more than 100 countries.
eToro is backed by regulatory authorities in the UK and Australia. It continues seeing growing popularity across Europe. However, American investors will be able to purchase its stock if the company meets its goal of being listed on the Nasdaq exchange.
eToro was founded in 2007 by Ronen and Yoni Assia. The firm is reportedly in talks with Goldman Sachs to underwrite its IPO.
MicroBT produces mining hardware, which is used to create cryptocurrencies such as Bitcoin. Earlier this year, this Chinese company announced plans to go public. It is the second-largest supplier of Bitcoin mining hardware.
MicroBT raised more than $700 million in 2019 and plans to sell its shares on an American stock exchange sometime in early 2021.
The sharp rise in cryptocurrency has raised demand for hardware produced by companies like MicroBT, which is recognized for developing some of the most efficient crypto mining products. A shortage of mining equipment has also spiked prices for this kind of technology.
BlockFi, a crypto-focused wealth management firm, may also be going public this year. Last summer, BlockFi brought its valuation to about $400 million after closing a $50 million series C fundraising round. And in early 2021, the company raised $350 million in a series D funding round co-led by Bain Capital Ventures, raising the company’s valuation to a sizable $3 billion.
Last year, the company hired Tony Lauro as its chief financial officer. A job posting for the role indicated BlockFi was looking for someone to spearhead its IPO strategy for 2021.
BlockFi was founded in 2017. It allows users to invest in cryptocurrency, open a BlockFi savings account and take out loans.
How to invest in crypto
Even as you keep your eyes peeled for crypto-based companies to launch their IPOs, there are many ways you can invest in cryptocurrency now. You can open a brokerage account that lets you trade cryptocurrency. Some of our top picks include Robinhood and SoFi, especially for beginners.
You can also invest in blockchain stocks. These are shares of companies involved with blockchain technology, which is used to create cryptocurrency and provide a vast variety of other services. These companies have been active in logistics, healthcare, financial services and data security.