Kraken to Go Public in 2022 via Direct Listing, Not IPO

UTC by Ibukun Ogundare · 3 min read
Kraken to Go Public in 2022 via Direct Listing, Not IPO
Photo: Kraken Exchange / Twitter

The crypto market has been seeing unusual growth these days, encouraging exchanges to go public. Kraken’s major rival in the US Coinbase has already received approval from the SEC for its direct listing.

Crypto exchange Kraken is considering going public in 2022 through a direct listing after the exchange platform saw record trading volumes in the first quarter amid the Bitcoin rally. Kraken has evolved over the years to become the world’s largest exchange in euro volume and liquidity. Founded in 2011, the exchange now has over 6 million clients and is currently ranked 4th largest crypto exchange by CoinMarketCap.

Kraken to Go Public amid Record Trading Volume

According to Kraken CEO and founder Jesse Powell, the exchange recorded gain amid a surge in the value of Bitcoin. In March, Bitcoin reached a new all-time high of over $60,000. At the time, traders attributed the rise in BTC’s value to the incasing demand for the king coin amid institutional investors.

Speaking in an interview with CNBC, Powell said:

“For us, any volatility is good but it’s always better when it’s on the way up. The first quarter just completely blew away the entirety of last year. We beat last year’s numbers by the end of February. The whole market has really just exploded.”

Also, Kraken recorded a surge in the number of new users that signed up on the platform in the first quarter of the year. The exchange said new users jumped four times, compared to the second half of 2020. In addition, spot trading volume in Q1 grew 1.5 times over spot trading volume recorded throughout 2020 to reach a record level of $160 billion.

Before now, Kraken CEO had said in early March that the exchange may go for an initial public offering (IPO) in 2022. Shortly after, a Fox Business reporter, Charles Gasparino, said that Kraken is planning to go public through an IPO or a merger with a Special Purpose Acquisition Company (SPAC). Gasparino added that Kraken’s executives are considering the market debut in the coming year “as online crypto exchange’s customer growth ramps up; industry sources expect a raft of crypto SPACs this summer and with that, much more regulatory scrutiny.”

Kraken CEO Says Exchange Will ‘Probably’ Prefer Direct Listing

The crypto market has been seeing unusual growth over the past year, encouraging exchanges to go public. Kraken’s major rival in the US Coinbase has received approval from the US Securities and Exchange Commission (SEC) for a direct listing on the 14th of April. Coinbase recorded $1.8 billion in revenue in the first quarter of the year. This is a record quarterly revenue and an increase over the company’s revenue in the whole of 2020.

Comparing Kraken’s public listing to Coinbase’s, Powell said that Kraken would “probably” go public through a direct listing.

Additionally, the CEO said that the company is in talks with investors regarding a new funding round. Noting that Kraken has a strong balance sheet, Powell added:

 “We’re not in a rush to raise capital. The reason to do it would just be to bring on some strategic investors who can help us with geographic expansion and growth.”

Other news from the crypto industry can be found here.

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