The IPO wave is sweeping through crypto. However, experts warn that Wall Street exposure brings both opportunities and risks.
- Wall Street exposure brings potential centralization risks
- Stablecoins are becoming a core part of the financial infrastructure
- Firms will have to navigate increased regulatory scrutiny
The crypto industry no longer operates on the fringes. The latest fundraising efforts and IPOs have shown an increasing appetite for systemic players that benefit from favorable regulation. This includes Circle’s blockbuster IPO, Tether’s reported fundraising at a staggering $500 billion valuation, and Kraken’s pre-IPO bid to secure $500 million in funding.
For some, this is a sign of the industry’s legitimacy. However, some experts warn about questions of decentralization and governance as crypto meets Wall Street’s standards.
“Circle’s USDC IPO earlier this year demonstrated that mainstream investors are now willing to pay a premium for exposure to regulated digital assets platforms when its stock climbed tenfold from $30 to $300,” said Farzam Ehsani, CEO and co-founder of VALR told crypto.news.
Ehsani added that similar moves by Tether and Kraken show investor appetite for well-regulated crypto firms that provide critical infrastructure. However, he also noted that Wall Street’s involvement creates added risks of centralization, which can impact innovation as shareholders pursue narrow interests.
Crypto is becoming core financial infrastructure
According to Shawn Young, chief analyst at MEXC Research, the IPO wave shows that the crypto industry is becoming a core part of financial infrastructure, especially for stablecoins.
“The macro narrative is equally compelling. Stablecoins in circulation are already collectively valued at over $296 billion and now account for over 1% of the U.S M2 money liquidity supply,” Young said. “CITI projects stablecoins to hit $4 trillion in a bull market scenario by 2030,” he added.
Lionel Iruk, senior advisor to Nav Markets and managing partner at Empire Legal, points out that further integration with Wall Street will bring both legitimacy and scrutiny. Under these conditions, firms will have to balance innovation with transparency.
“Public listing and fundraising bring heightened shareholder operational scrutiny, demanding rigorous reporting, governance, and adherence to securities laws across multiple jurisdictions,” Lionel Iruk, Nav Markets.