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Kraken Considering an IPO on the Stock Exchange

Hassan Maishera
A bitcoin, the Kraken logo on a phone and a $100 bill

Crypto exchange Kraken is considering whether to go public via an initial public offering (IPO) or a direct listing.

US-based cryptocurrency exchange Kraken is currently considering the options of going public via an IPO or direct listing. The exchange is planning to become a publicly-listed company by next year.

Crypto exchange Coinbase went public via a direct listing method two months ago. However, the stock hasn’t performed excellently since then. It hit an opening-day high of $429, but it has lost nearly 50% of its value since then, and Coinbase’s stock is currently trading at $223 on the NASDAQ stock exchange.

Following Coinbase’s performance, Kraken’s CEO Jesse Powell said they are considering their options before going public next year. He had stated earlier this year that Kraken would go public via a direct listing method. However, with Coinbase underperforming so far after following that path, Kraken is now reconsidering its options and could go public via an IPO.

Powell told Fortune, “An IPO is looking a little more attractive in light of the direct listing’s performance. I would say we’re looking at it more seriously now, having the benefit of seeing how the direct public offering played out for Coinbase.”

The Kraken CEO said Coinbase’s poor performance is due to the direct listing method is used in going public. He pointed out that direct listing allows most of the price discovery to occur organically in the market while bankers have greater control of the pricing system in an IPO.

He also added that in an IPO, existing shareholders are not allowed to sell their shares at debut, but it is permissible via a direct listing method. Some Coinbase executives and early investors sold billions of dollars worth of shares during the first few days of the company going public.

If all goes as planned, Kraken will become the second publicly-listed crypto exchange in the United States. Powell has previously said that the exchange could consider going public in another country due to the tough regulatory environment in the United States.

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