On Monday, BitGo, one of the industry’s largest crypto custodians, said it planned to go public in the US in a filing with regulators.
The California company follows a slew of summer filings ranging from Grayscale, the crypto fund manager, to the exchanges Bullish and Gemini.
It also comes on the heels of Circle’s blowout listing on the New York Stock Exchange in June. The stablecoin issuer’s stock has skyrocketed 597% since its debut.
Yet the window on the IPO rally may be closing as anxiety mounts that President Donald Trump’s trade war on most of the US’s trading partners is starting to take its toll on the economy.
Inflation worry
Consumer prices increased 2.9% on an annualised basis in June, and US data shows tariffs are increasing the cost of some goods.
Almost two-thirds of Americans disapprove of Trump’s handling of inflation, according to a CBS News/YouGov poll on July 20.
With Trump’s August 1 deadline for a trade deal with the European Union and other nations rapidly approaching, investors may be asking whether the red-hot IPO rally is about to cool.
The spate of offerings across industries has been a long time coming.
Stock in CoreWeave, an AI company, has jumped 300% since its March listing, and shares in the Denver-based defence contractor Voyager Technologies posted an 82% rally in its debut on June 12.
As for crypto, there’s no mystery why Circle and its ilk have done so well in the stock market.
Bitcoin has jumped from one all-time high to the next for weeks, and it hit a record $122,000 in July. This week, the entire crypto market reached a cumulative value of $4 trillion for the first time.
Record prices have been buoyed by incoming regulations from a crypto-friendly White House, too.
On July 18, Trump signed into law landmark crypto legislation that regulates how companies can issue stablecoins in the US.
The Clarity Act, which will determine how other cryptocurrencies are to be regulated, is expected to hit Trump’s desk later this year, according to the administration’s crypto czar David Sacks.
Trump tariffs
For now, employment data, which economists closely monitor as it signals where rising import costs will have the most immediate effect, has been resilient.
But alongside creeping inflation, the US bond market has signalled bearishness, too.
After the release of hotter-than-expected inflation data, yield on the 30-year Treasury bond hit its highest close since May.
With government debt yielding nearly 5%, investors may view riskier ventures, such as newly listed stocks and cryptocurrencies, as less appealing.
After all, companies like Klarna, Chime and Hinge Health were said to have postponed their public listings when the Trump tariff turmoil kicked off in April.
Further bearish signals may emerge if new tariffs are implemented in August.
Dozens of trade partners, including Canada and the EU, are facing new import taxes of up to 30% unless they reach a compromise before the deadline.
The European Commission, the EU’s governing body, is already mulling harsh countermeasures that risk escalating the trade duel.
Crypto prices have yet to reflect the same angst. Yet the asset class tends to move in tandem with stocks.
And even Circle’s shares are finally slowing down. The stock has skidded 10%, to $216, since June 22.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at [email protected].
