First Mover: Crypto’s $35T Moment Could Come From Analog-World Stock Listings
The stock market isn’t usually considered an ally of cryptocurrencies, but with the big U.S. exchange Coinbase now rumored to be considering a share listing, some digital-asset industry insiders say a move toward more public ownership could accelerate mainstream adoption.
By becoming publicly traded, cryptocurrency-focused companies could appeal to investors in the $35 trillion U.S. stock market. Back-of-the-envelope math shows that just a 1% allocation into crypto stocks could mean $350 billion of new investments for companies in the space. Compare that with the $287 billion total market value of digital-asset markets, and suddenly there’s a lot more capital going into the industry, even if it’s not directly into cryptocurrencies.
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New listings and initial public offerings would also be sure to generate a raft of coverage on analog-world TV channels like CNBC, while the Wall Street Journal and Bloomberg News publish ostensibly breathless headlines on first-day trading action. No publicity is bad publicity, and all this just gives digital-asset companies generous exposure to a broader swath of potential investors who typically only deal in stocks.
Steve Ehrlich, CEO of the crypto brokerage platform Voyager Digital, which has been publicly traded on the Toronto Stock Exchange since February 2019, told First Mover in a phone interview that stock-market listings promise a whole new vista for the cryptocurrency industry.
“We always felt that being a public company was something that was necessary in the crypto space,” Ehrlich said, over the phone. “It’s great for the industry.”
A handful of crypto companies have already gone down the route of listing shares.
According to CoinDesk Research, there’s more than two dozen publicly-traded firms, from the the bitcoin-mining firm Argo, which listed on the London Stock Exchange in 2018, to the bitcoin-mining computer maker Canaan, which listed depositary receipts on the Nasdaq late last year. Bitmain, another mining-computer manufacturer, previously considered an initial public offering (IPO) in Hong Kong in 2018 and is rumored to be exploring a listing in the U.S.
Earlier this month, industry sources told Reuters that the San Francisco-based exchange Coinbase, worth approximately $8 billion at its last valuation, was seriously considering a direct listing in 2021.
Just this week, the Alibaba affiliate company Ant Group announced it was planning an IPO in both Shanghai and Hong Kong at a reported $200 billion valuation. Although the company is best known for its payment app Alipay, the Hangzhou-based company also runs its…