Multiple cryptocurrency-based firms like Bakkt, whether they be mining farms or trading exchanges, are opting to go public to raise additional capital and increase credibility.
The latest organization is Bakkt, the cryptocurrency exchange owned by Intercontinental Exchange Inc. (ICE). ICE owns the New York Stock Exchange and a variety of other financial and derivatives markets.
Preparing for an IPO
It likely comes as no surprise that the company behind the New York Stock Exchange intends to take its crypto exchange public. This follows the drastic price increases seen in the markets over the last few months.
Bakkt will be the first major American cryptocurrency exchange to list. Competing firms like Coinbase and eToro are gearing up for their own IPOs.
Bakkt came into the cryptocurrency space as an institutionally-backed super exchange, with prominent VC firms like Pantera Capital and Microsoft’s venture arm as backers.
With a current valuation of over $2 billion, the IPO is likely to draw in large investors. Bakkt’s IPO may be beneficial for the company and serve as a general indicator of the public’s outlook on cryptocurrency-based firms as a whole.
Is Bakkt Keeping up With Competitors?
According to Twitter account @BakktBot, an automated account that tracks Bakkt’s exchange volume, the company’s day-to-day volume has taken a pretty significant hit. Volume is down approximately 40% to only slightly more than $20 million.
That accounts for about 606 Bitcoins, a massive decrease of its all-time high bitcoin trading volume of 18,718 BTC it facilitated in mid-September of 2017.
With other centralized and decentralized exchanges seeing record trading volumes alongside rising prices, this likely doesn’t bode well for the lagging operator.
Coinbase, a Bakkt competitor also preparing to list, is doing almost $4 billion in daily transaction volume in comparison.
Coinbase is slated to have a much higher valuation than Bakkt, possibly as high as $28 billion. This is a 12-fold multiplier over Bakkt. However, Coinbase is also doing more than 12 times the daily transaction volume.