Kraken Reconsidering Direct Listing Following Coinbase Crash

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  • Kraken founder and CEO Jesse Powell is reconsidering his intention to take the exchange public via a direct listing
  • Kraken had been due to list publicly next year, but following Coinbase’s performance Powell is considering an IPO instead
  • If the anti-crypto sentiment remains, Kraken may not list at all

Kraken founder and CEO Jesse Powell has told Fortune that he is reconsidering his plan to take the company public through a direct listing having witnessed Coinbase’s performance since it listed in Nasdaq in April. Citing the mass selling that occurred in the opening days that helped crash the price 47% in a little over a month, Powell said the Kraken team were looking more seriously at an IPO to avoid a repeat performance.

Kraken Rethinking Direct Listing

Kraken announced intentions to go public in March through the same direct listing process Coinbase adopted. However, Powell, who founded Kraken in 2011 and launched it in 2013, told Fortune he is having second thoughts following the Coinbase launch:

Not having lock-ups, having billions of dollars of insiders be able to dump their shares, you know, on day one…I think it has a dampening effect on the market.

This is indeed what happened to Coinbase, with whales including CEO Brian Armstrong dumping some $5 billion worth of stock onto the market on the opening day. This immediate dump, followed by continuous selling in the following weeks, saw Coinbase shares tumble from highs of $430 to lows of $208 in mid-May.

Public Listing Depends on Crypto Sentiment

Clearly Powell wants to avoid a repeat for Kraken, telling Fortune that the company was looking “seriously now” at an IPO, despite this being “a very different process”. Powell added that no decision has been made on which direction to take, stating that Kraken’s chiefs will “see how the market looks in the second half of next year”, with the potential for a delay if sentiment around Bitcoin and other cryptocurrencies is still as low as it is now.