Crypto- and blockchain companies are attracting billions of dollars in valuations, as there will continue to be significant investment in space in 2021. Exchange platforms such as Coinbase and Kraken have had staggering numbers related to their fundraising plans, with the first to be published with a direct listing and the latter preparing for a fundraising round.
Since the company officially announced its plans for a general listing, the cryptocurrency analysis company Messari has valued Coinbase at approximately $ 28 billion. Meanwhile, news of Kraken’s efforts to attract investment from private companies in a new round of fundraising has led insiders to estimate the amount at $ 10 billion or more.
The high value of these investments gives credibility to the growing popularity of cryptocurrencies as the total market value approaches $ 1.5 trillion. When investors enter directly into the cryptocurrency markets, others look for opportunities to participate in the largest companies in the ecosystem with the potential for significant return on investment in the future.
Kraken says that the valuation of 10 billion dollars is underestimated
Cointelegraph reached out to Kraken to share its 2021 fundraising plans, given that the latest round of fundraising through Bnk To The Future in 2019 raised $ 13.5 million from 2,000 investors and valued the company at $ 4 billion.
Two years later, Kraken is in talks with major investors, which reportedly include Fidelity, Tribe Capital and General Atlantic. A spokesman for the company told Cointelegraph that the figures in initial reports may underestimate Kraken’s actual value: “We will not speculate too much on the company’s value, but $ 10 billion will be a low estimate for us.”
Kraken also declined to give details on how it used the capital raised from investors, but indicated that it is in a very strong financial position and receives a lot of interest from potential lenders, with a spokesman saying: “We have received a lot of internal interest rates “This is a positive cash flow and a very strong balance sheet. If we want to increase new capital, it will be either for strategic reasons or to accelerate the pace of acquisitions.”
A spokesman for the company also agreed that the desire to invest in companies such as Kraken further legitimizes the crypto space and blockchain as a thriving sector that shapes the finances and payments of the future, adding:
“The cryptocurrency industry has reached a dominant level of maturity and acceptance, as it makes sense to enter public markets. But in the first days, this is still a lot; Kraken, for example, will hardly consider offering shares before 2022. “.
Lessons from the past
Three decades have passed since the advent of the Internet, and these early years can be compared to what is happening in the cryptocurrency and blockchain industries. Many companies have attracted significant investment and become nothing, while companies such as Amazon continued to be world leaders in this field.
A similar trend was observed during the growth in the number of initial coin offerings in 2017, when some companies with unfinished ideas attracted significant investments but were unable to complete the projects they started. However, others have committed to creating products and services that have been very successful, while many of the largest cryptocurrency exchanges and payment service providers continue to thrive.
Matt Greenspan, founder of the digital consulting firm Quantum Economics, told the Cointelegraph that parallels can be drawn between the early days of the Internet in the 1990s and the blockchain’s childhood and the mysterious space of the 2000s. As Greenspan explained, forward-thinking investors must ultimately balance the risks and potential benefits of investing in emerging markets and technologies:
“It’s funny how big companies tend to resist new technologies. In the late 1990s with the use of the Internet and over twenty years of blockchain, we saw five stages of adoption. In the end, those who use new technology take risks, but the benefits are often enormous. “.
Computer scientist Xinshu Dong, who co-founded the blockchain-powered platform Zilliqa, echoed Greenspan’s feelings about the similarities between the dot-com bubble and recent developments in the cryptocurrency field.
Dong told the Cointelegraph that some investments are being made based on speculative predictions and unconfirmed market demands during the ICO era in 2017 and the current cryptocurrency boom: “When the Dot Com bubble burst, 51% of tech startups and $ 1.7 trillion closed . i. In the capital. He was anointed. He also added that while some companies such as Pets.com have closed their stores, several others have emerged such as Amazon, Qualcomm and Cisco.