Part 14 → A Series on the Future of Cryptocurrency
Initial public offerings are something that many in the cryptocurrency market have talked about, but there has been little action. There are some companies that see the potential in going public in this manner. But, there are also many more in no position to do so. So why should companies take this leap into IPO and which companies can actually stand to benefit from this option?
Why is IPO so attractive to these crypto market leaders?
There are some in the crypto-world that see potential dangers in toying with IPO. These systems require companies to deal with a lot more red tape on regulations, which can be time-consuming and frustrating. They also require a greater level of transparency in the public eye. There is also the fact that this traditional approach steers companies away from the roots of ICOs and aims of decentralisation. There are comfortable, fat whales out there that might not like this change.
However, there is a flip side to this that can benefit investors. IPO can:
a) draw in clients and traders currently put off by the cryptocurrency world.
b) bring in new regulations and greater cooperation with leading agencies.
c) create that safer, transparent system lacking in the risky world of cryptocurrency.
Essentially, this creates a more appealing, secure midway point between traditional banking and cryptocurrency trading. Cryptocurrency becomes accessible without the same risk. The mere promise of regulation is enough for new traders convinced that the crypto world is full of high stakes gambles and con men. At the moment, these ideas a little more than hopes and dreams for some companies. This is the next step in a bigger plan.
Why haven’t we seen cryptocurrency IPO yet?
The shift in focus and regulatory steps are a downside here. There is also the problem that it takes a lot of foresight and planning to create a company that can evolve into with IPO. This is a progression for companies that already have a strong placement in the market and want to build the brand in a more traditional playing field. It is for someone with a strong enough business plan and presence. This is one of the reasons why so few companies have made that leap. Either they didn’t have that long-term plan in place, or they failed to get close to a point where IPO was an option. We can’t forget that new platforms come and go in the blink of an eye. The lucky few with longevity may be able to progress.
Who are some of the major players in this evolution of cryptocurrency?
At the moment, there are three important names to keep in mind here. They are:
a) Epoch Partners Limited
Epoch Partners Limited has filed their motion for what is set to be the for cryptocurrency-related IPO. They did so via the Japanese Financial Services Agency in September and promise a cap of 100b yen (or $900m). A partner of the company cited the rise of digital assets in investment portfolios as a cause for interest.
The more catchily-named Bitfury has also stated interest in moving into IPO territory in the next couple of years. Japan isn’t the intended target this time. Instead, their sights are set on Amsterdam, London and Hong Kong.
Finally, there is Coinbase. This name should come as no surprise to those following the company’s fortunes. There has been speculation over an announcement for a while now. On October 30th it was announced that there are plans to take Coinbase public in the future. The company is certainly in a good position to do so, with a new license from the New York Department of Financial Services.
Naturally, there are plenty of rumours flying around about the intentions of other companies. For example, there is some speculation of a venture by Bitmain. The IPO seems to be the logical next step for companies in a financially secure enough position to take it. Those that have the monetary backing, consumer interest and secure regulations could improve their status in coming years, or even months.
2019 could be the year that the cryptocurrency IPO becomes a reality. These public offerings could bridge the gap between the industries like never before.