Grayscale secretly submitted an IPO application, managing assets of $50 billion.
Cryptocurrency asset management giant Grayscale Investments announced on July 14 that it has confidentially submitted an initial IPO application to the U.S. Securities and Exchange Commission (SEC), officially launching the IPO process.
Grayscale stated in a release that it has submitted a draft registration statement to the SEC based on Form S-1, but has not yet determined the number of shares to be registered or the expected price range.
As a subsidiary of Digital Currency Group, Grayscale currently manages approximately $50 billion in assets, making it one of the largest cryptocurrency asset management companies globally. Its core products include the Grayscale Bitcoin Trust ETF (GBTC) and the Grayscale Ethereum Trust ETF (ETHE), which together manage over $30 billion in assets, with GBTC managing $21.72 billion and ETHE at $3.4 billion.
Grayscale has adopted a confidential application method. According to SEC regulations, companies can keep sensitive financial details confidential before formally proceeding with an IPO, typically disclosing the prospectus only 15 days before the roadshow begins. The company stated that formal registration is expected to take place after the SEC completes its review process, but it still depends on market and other conditions.
Market valuation expected to reach $7 billion, with fundraising estimated at $500 to $700 million.
According to market analysts' estimates, Grayscale's IPO fundraising could reach $500 to $700 million, about 9.2% of the company's valuation. Based on this, Grayscale's overall valuation could range between $5.4 billion to $7.6 billion. The company chose to apply for listing when the cryptocurrency market was performing strongly, with Bitcoin's price breaking through to $123,217 yesterday, setting a new historical high, and a year-to-date increase of 30%, even surpassing gold to become the best-performing asset this year. (As of the time of writing, Bitcoin's price is $117,027.)
Source: TradingView Bitcoin's price broke through to $123,217 yesterday, setting a new historical high.
Grayscale's IPO plan coincides with the recovery of the U.S. IPO market. According to data from market research firm Renaissance Capital, the total amount raised from IPOs across all industries in the U.S. has reached $15.7 billion this year, a 103% increase from 2022, and the total amount raised for the year is expected to exceed $19.3 billion in 2023.
It is important to note that Grayscale faces a significant outflow of funds after converting to an ETF, mainly due to its product fees being higher than its competitors, increasing the cost of holding for investors. However, the market generally believes that Grayscale is a key driver for the approval of spot Bitcoin ETFs, as the company won its legal battle with the SEC, ultimately facilitating the approval of multiple Bitcoin ETFs.
A wave of IPOs from crypto companies emerges, and Circle's success story inspires peers.
Grayscale's IPO application follows in the footsteps of the successful Circle, a stablecoin issuer. Circle officially listed on the New York Stock Exchange on June 5, raising over $1.05 billion, with a valuation of $6.9 billion. After its listing, Circle's stock price performed exceptionally well, surging over 500% within a few weeks, with a current market capitalization of $42.24 billion, becoming a typical example of a successful cryptocurrency company IPO.
Further Reading
Circle's stock surged nearly 200% upon listing! But the IPO allocation faced criticism: spending millions only to get a small number of shares.
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In addition to Grayscale, several cryptocurrency companies are preparing to enter the public market. The cryptocurrency exchange Gemini submitted a confidential S-1 application in June, while Kraken plans to go public in 2026. Companies such as Bullish, OKX, BitGo, and Anchorage have also been rumored to have IPO plans. Digital asset major broker FalconX is also considering an initial public offering.
The Trump administration's friendly policies toward cryptocurrencies have provided a favorable environment for this wave of IPOs. As U.S. lawmakers gradually establish a clearer regulatory framework for cryptocurrencies, particularly regulations targeting stablecoin issuers, institutional investors' interest in digital assets continues to rise.
Further Reading
The U.S. House of Representatives' 'Crypto Week' kicks off on July 14! What are the three major cryptocurrency bills? Will they pass?
The Democratic Party has initiated an anti-crypto corruption week! Against the backdrop of Congressional Crypto Week, will there be uncertainties regarding the stablecoin bill?
Currently, during Washington's 'Crypto Week,' the U.S. House of Representatives will discuss multiple cryptocurrency-related bills, and these regulatory decisions may further impact how companies like Grayscale operate in the U.S. digital asset market.
Grayscale founder Barry Silbert also explained the company's listing decision to the cryptocurrency community and shareholders on social media, indicating the importance of this IPO. If the SEC approves Grayscale's registration application, the company could become the next well-known cryptocurrency firm to successfully transition from a private entity to a publicly traded company.
'Grayscale secretly applies for IPO listing! Managing assets of $50 billion, valuation at a glance' This article was first published on 'Crypto City.'
