Written by: Tanay Ved, Victor Ramirez, Coin Metrics
Compiled by: AididiaoJP, Foresight News
Key points:
In a favorable regulatory environment and with clear investor interest in exposure to public market crypto assets, Kraken, Gemini, and Bullish are planning to go public (IPO).
Coinbase's IPO in 2021 set a benchmark for the industry. Coinbase's valuation at listing was $65 billion, with 96% of its revenue coming from trading fees at that time. Now, subscription and service revenue accounted for 44% in Q2 2025.
Among the IPO candidate exchanges, Coinbase still leads with 49% of spot trading volume. Bullish and Kraken each account for 22% and are rapidly expanding new services.
Not all reported trading volumes carry equal value. Analyzing wash trading reveals inflated activity on some platforms and emphasizes the necessity of assessing the quality and transparency of exchanges.
Introduction
In the history of the cryptocurrency industry, for most of the time, the U.S. government has had a lukewarm, even hostile, attitude towards it. But last week, the situation changed positively.
The Presidential Working Group on Digital Assets released a 166-page report outlining the state of digital assets and proposing policy recommendations for establishing a comprehensive market structure. Meanwhile, SEC Chairman Paul Atkins announced the 'Crypto Projects' initiative in a public speech, aiming to make the U.S. the 'global crypto capital' by on-chain financial markets, simplifying the cumbersome licensing process for cryptocurrency businesses, and supporting the creation of financial 'super apps' that offer multiple services.
The main beneficiaries of this new regulatory framework are centralized exchanges. Several private centralized exchanges, such as Kraken, Bullish, and Gemini, are seeking to go public (IPO) in this relatively favorable environment. As these companies open up to public investment, it is essential for investors to understand their fundamental drivers. In this article, we will delve into the key metrics of these exchanges and highlight some considerations when using exchange report data.
The IPO frenzy of cryptocurrency exchanges
Since Coinbase went public in April 2021, there have been very few related IPOs in the crypto industry over the past four years, primarily due to the adversarial relationship between cryptocurrency companies and the former SEC. As a result, private companies have been unable to gain liquidity from the public markets, and non-qualified investors have been unable to profit from investing in these companies. With the Trump administration's commitment to a more friendly regulatory regime, a new batch of private cryptocurrency companies has announced plans to go public.
This environment, combined with renewed investor interest in public market crypto exposure, has birthed some of the most explosive IPOs, such as Circle's recent public IPO. Gemini, Bullish, and Kraken plan to list in the U.S., hoping to seize this opportunity to position themselves as full-service providers of digital assets.
Coinbase's 2021 IPO
Coinbase's 2021 IPO provided a useful benchmark for evaluating the investment prospects of potential exchange IPOs. The company went public on April 14, 2021, through a direct listing on Nasdaq, with a reference price of $250 per share, a fully diluted valuation of $65 billion, and an opening price of $381. Coinbase’s listing came at the peak of the 2021 bull market, when Bitcoin prices were close to $64,000, and exchange trading volume exceeded $10 billion.
According to its S-1 filing, Coinbase's business model at the time was very simple, with most revenue coming from trading fees:
“Since our inception until December 31, 2020, we generated over $3.4 billion in total revenue, primarily from retail and institutional users based on trading volume fees on our platform. As of December 31, 2020, trading revenue accounted for over 96% of our net revenue. We leveraged the advantages of our trading business to expand and broaden our platform, launch new products and services through an investment flywheel, and grow our ecosystem.”
Source: Coin Metrics Market Data Pro and Google Finance
Today, Coinbase is more like a 'full-stack exchange.' Although trading remains its core business, its business model has significantly expanded into the full-stack realm of cryptocurrency services. This shift has begun to manifest in the relationship between COIN price and trading volume, where the two were closely correlated early on, but as the importance of 'subscription and service revenue' (including stablecoin income (USDC interest), blockchain rewards (staking), custody income, etc.) has increased, this correlation has weakened:
Coinbase Q1 2021:
Revenue of $1.6 billion
Trading revenue of $1.55 billion (96%)
Subscription and service revenue of $56 million (4%)
Coinbase Q2 2025:
Revenue of $1.5 billion
Trading revenue of $764 million (51%)
Subscription and service revenue of $656 million (44%)
Corporate interest income of $77 million (5%)
Comparative analysis of upcoming IPO exchanges
Based on this framework, we listed estimated data on valuations, trading volumes, and business areas for upcoming IPO exchanges.
Source: Coin Metrics Market Data Pro and public company filings (data as of August 1, 2025)
Although the services offered by these exchanges tend to be consistent, there are significant differences in market influence and trading activity scale.
Founded in 2013, Kraken has reached a more mature stage. The company has seen strong financial growth, with projected revenue of $1.5 billion in 2024 (up 128% from 2023) and revenue of $412 million in Q2 2025. Kraken is also strategically expanding into areas such as tokenized stocks, payments, and on-chain infrastructure (Ink) through acquisitions like NinjaTrader and obtaining European MiCA licenses. Its target valuation is around $15 billion, with 2024 revenue of $1.5 billion and a revenue multiple of 10x, slightly lower than Coinbase's 12.7x.
In contrast, Gemini is smaller. Its average trading volume over the past year was $164 million, the lowest among these exchanges. Gemini's latest valuation traces back to $7.1 billion from its 2021 Series A funding, with private market valuations at $8 billion. Besides spot and derivatives business, Gemini also offers staking and credit card products to generate yields on user deposits and is also the issuer of Gemini Dollar (GUSD), but its circulating supply has shrunk to $54 million.
Bullish ranks high in trading activity, with an average trading volume of $1.95 billion over the past year. Bullish Exchange is at the core of its trading and liquidity infrastructure, focusing on institutional clients and regulated in Germany, Hong Kong, and Gibraltar, while actively seeking U.S. licensing. Additionally, Bullish has expanded into the information services sector by acquiring CoinDesk. According to F-1 filings, the company has a net profit of $80 million for 2024, with a net loss of $349 million. Based on a canceled SPAC deal in 2022, its initial valuation was close to $9 billion, and it is currently seeking a valuation of $4.2 billion.
Exchange trading volume trends
Source: Coin Metrics Market Data Pro
Overall, Coinbase and other upcoming IPO exchanges account for only about 11.6% of the reported spot trading volume of centralized exchanges. Binance alone accounts for 39%, while other offshore exchanges also hold significant shares. Among the exchanges of interest, Coinbase accounts for 49% of spot trading volume, with Bullish and Kraken each accounting for 22%. Since its launch in 2022, Bullish's share has steadily increased, while Kraken's market share has diminished due to intensified competition.
Trade on the order book: Analyzing the economic activity of exchanges
As mentioned above, trading volume is one of the most predictive indicators for estimating valuations. However, reported trading volumes can vary by exchange, becoming a potentially misleading data point.
Despite most major cryptocurrency exchanges cracking down on wash trading, some irregularities still exist. Our Trusted Exchange Framework methodology details how to detect anomalous trading activity and assesses qualitative factors such as regulatory compliance.
Source: Trusted Exchange Framework
A more robust signal we developed for detecting buy-sell trades is the calculation of wash trading frequency. Our testing method is as follows:
We randomly sampled 144 five-minute periods from January to June 2025, resulting in nearly 20 million trades.
Select one trade for each exchange and period.
If another trade occurs within 10 trades or 5 seconds, and the direction is opposite, with almost the same amount and price (within 1%), mark these two trades as wash trades.
Repeat this process for each trade. If a trade has been marked as a wash trade, skip it.
Calculate the volume of trades marked as wash trades and divide it by the total volume.
In the diagram below, we plot the trading samples of a few exchanges within a timeframe and mark suspected wash trades. Each gray dot represents a normal trade, while the green and red markers represent wash trades.
Source: Trusted Exchange Framework
Due to the proximity of this method, we anticipate some false positives, i.e., wash trades caused by normal market activities (such as market makers facilitating trades by providing liquidity on both sides of the order book). However, compared to industry baselines like Crypto.com and Poloniex, the high proportion of wash trading raises concerns about the reliability of their reported trading volume data.
For example, from Q1 to Q2 of 2025, we estimate that Crypto.com’s BTC-USD ($201 billion), BTC-USDT ($192 billion), ETH-USD ($165 billion), and ETH-USDT ($160 billion) trading volumes will be approximately $720 billion. Based on the above estimated ratios, about $160 billion of the trading volume in these trading pairs comes from wash trading.
Conclusion
As several cryptocurrency exchanges are about to go public, it is necessary for investors to understand the relative trading volumes of these platforms. While trading volume helps estimate trading revenue (which still accounts for a large portion of revenue), qualitative factors such as business diversification, the presence of wash trading, and regulatory compliance are also important considerations in assessing the quality of exchanges. This information can help market participants determine whether valuations are reasonable.
Four years after its IPO, Coinbase remains in the lead, primarily due to its diversification of revenue sources such as custody, stablecoins, and Layer-2 fees. However, competition in the exchange market is intensifying. Other exchanges must diversify their revenue sources away from heavily market sentiment-dependent trading fees to compete. As market structures gradually clarify, exchanges are allowed to evolve from trading venues to comprehensive super apps. How these exchanges seize this opportunity and whether they can realize their visions and replicate the successes of past groundbreaking IPOs will be important developments to watch in the coming year.
