According to a recent report by The Information, crypto and artificial intelligence have dominated the US initial public offering (IPO) market.
The market saw 51 U.S. tech IPOs, which is a high number of companies successfully going public that raised a combined $16.8 billion.
This performance was “well above the average over the past three years,” a major revival after a period of relative quiet in the IPO market (especially compared to the boom years of 2020 and 2021).
Venture Global, a major U.S. liquefied natural gas company, pulled off one of the year’s largest IPOs, raising $1.75 billion by selling 70 million shares at $25 a piece.
When it comes to crypto, Circle Internet Group, the issuer of the USDC stablecoin, raised roughly $1.05 billion in its IPO, pricing 34 million shares at $31 each.
Bullish, the crypto exchange backed by Peter Thiel, also had a massive IPO. It raised $1.1 billion by selling 30 million shares at $37 each, valuing the company at about $5.4 billion.
Pinning hopes on lower interest rates
Bankers are hopeful that declining interest rates will “broaden the market in 2026.”
High interest rates make it more expensive for companies to borrow money and reduce the present value of future earnings (which is how high-growth tech companies are typically valued). Declining rates increase valuations, which will make a public offering more attractive and profitable for the company and its private investors.
Lower rates generally mean investors are more willing to take risks. When borrowing is cheap, money flows more easily into growth-oriented investments like new IPOs, especially in the tech sector.
A decline in rates is expected to allow more companies to successfully go public, which will broaden the market.