In the current financial landscape, the demand for shares of private crypto companies such as Circle, Kraken, and Chainalysis is skyrocketing in the secondary market. Private investors and crypto funds are actively purchasing these shares in anticipation of these companies gearing up for a crypto IPO in the near future.
Recent reports from Bloomberg indicate that the price of secondary shares for these private crypto firms has surged significantly due to the heavy demand from investors. Trading activities in equities of Circle, Kraken, and Chainalysis have seen a notable increase, highlighting the growing interest in these top crypto firms.
According to data from Forge Global, the buy-side demand for crypto assets in the first half of 2024 was 28% higher compared to the second half of 2023. This heightened demand has resulted in a significant boost in the implied price of equity for crypto exchange Kraken, which is up 77% year-to-date. Similarly, the share prices for Ripple and Chainalysis have also experienced notable increases, soaring by 13% and 17%, respectively.
Andrew Saeta, co-head of institutional sales at Forge, has commented on the current market conditions, noting the strong demand from both individual and institutional investors. The market is currently experiencing robust activity, driven by the increasing interest in crypto assets and the anticipation of upcoming IPOs in the sector.
The surge in shares of crypto firms has been fueled by various factors, including the recent launch of the spot Bitcoin ETF, which has sparked a rally in the crypto market. Institutional players are now eagerly awaiting the launch of spot Ethereum ETFs, further boosting market sentiment.
Despite the growing demand for crypto assets, particularly in the context of the upcoming US presidential elections in 2024 where crypto policy has taken center stage, the overall demand is still lagging behind the levels seen in 2021. Valuations of crypto firms have seen significant increases, but demand has yet to catch up with these soaring valuations.
Secondary market deals for companies like Fireblocks and Chainalysis are still trading at discounts ranging from 40% to 70% below their most recent funding rounds. However, Stan Miroshnik, founder of TenSquared Capital, highlights the positive developments in the market, noting that many larger crypto companies have shown strong operational performance and improved fundamentals in recent months.
Looking ahead, if the crypto market rally continues, we may witness a surge of crypto IPOs hitting Wall Street by the end of 2024 or early 2025. The market conditions are favorable for re-evaluating secondary opportunities, with many crypto companies demonstrating resilience and financial stability in the current environment.
Overall, the high demand for shares of Circle, Kraken, and Chainalysis in the secondary market reflects the growing interest in crypto assets and the anticipation of significant developments in the sector. Investors are closely monitoring these companies as they prepare for potential IPOs, driving trading activity and share prices to new heights.
