Cryptocurrency exchange Kraken has revisited its approach to its planned listing on the stock market, building on the experience of competing platform Coinbase. Kraken CEO Jesse Powell previously said they were considering a direct listing, but the company is now leaning towards a more accepted initial public offering (IPO).
Coinbase’s shares began trading in the stock market in April and, despite a high initial valuation, quickly lost about a third of its value. Powell told Fortune that the volatility in Coinbase’s securities could be attributed to the company’s decision to go directly to a listing rather than an IPO option. In a direct listing, existing shareholders are free to dispose of them immediately, while in an IPO, the pricing process is more controlled.
“An IPO seems to be a slightly more attractive option in light of the direct listing performance,” Powell said. “We’re now taking this scenario more seriously as we had the opportunity to look at the development of Coinbase’s direct listing.”
At the same time, Powell stressed that they are still going to enter the stock market in the second half of 2022. By that time, a more detailed analysis of the Coinbase listing will likely be available, and investors will begin to trust the crypto industry more, he added.
As Fortune notes, the IPO choice will force Kraken to rely on the participation of traditional Wall Street banks, some of which are interested in cryptocurrencies for fear of being lagged behind in technological development.
“I think Wall Street is very attached to traditional business practices,” CEO Kraken said in a comment on Coinbase’s stock performance. – Its members have something to lose because of the success of our space. People experience cognitive dissonance as they become aware of the imminent decline of traditional finance. “
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