Binance’s U.S. Affiliate Plans to Join Coinbase as Crypto Presence on Wall Street Grows

FAfter Coinbase (COIN) listed in 2021, Binance.US is poised to become the latest cryptocurrency exchange to make waves on Wall Street as the company raises some $200 million in a round of seed funding with an upcoming IPO firmly on the cards.

As a result of its funding round, the US arm of the world’s largest cryptocurrency exchange was valued at $4.5 billion, and Binance’s first-ever external funding round attracted investment from companies across the world. venture capitalists like RRE Venture and asset manager VanEck among other key industry players, according to one firm. statement.

According to Binance.US CEO Brian Shroder, the company will look to launch its IPO in two to three years, following Binance’s unprecedented decision to secure external capital.

“I personally think it’s worth going through the IPO process because it requires a lot of regulatory discussion and those are things that we welcome and are excited about,” Shroder told TechCrunch, while noting the merits of opting for an initial audience. offer.

While it’s reasonable to expect a company like Binance to launch an IPO, rival exchange Coinbase opted to go with a direct listing, helping the company circumvent the need for a subscriber.

In raising capital, Binance investors have included companies based on diversity and inclusion like the LGBTQIA+ investment syndicate, Gaingels, as well as Gold House, which is a non-profit organization that provides representation and more multicultural equality.

Launched in 2019 as a separate legal entity from, Binance.US has become one of the largest crypto exchanges by trading volume in the United States, with a 24-hour volume of 318 million dollars. Based on trading volume, Binance.US is ranked among the top 10 global crypto exchanges and is the largest country-specific exchange in operation.

The main appeal of the exchange is its relatively low transaction fees, which are capped at 0.1%, according to Shroder, and they decrease with trading volume. Binance’s main peer, Coinbase, for example, charges around 0.6% for trades under $10,000.

Learn from the Coinbase List

In April 2021, Coinbase became the first major cryptocurrency exchange to debut on the stock market. Arriving on NASDAQ under the symbol COIN, the listing coincided with Bitcoin’s post-halving rally which saw the value of the asset soar to an all-time high of around $63,600 the week of the direct listing. of the stock market.

Unfortunately for Coinbase, less than a month later, the cryptocurrency market had experienced a severe crash that would eventually wipe out over 50% of the entire market’s capitalization within weeks.

As a result, COIN stock price has fallen in line with the market and despite a brief rally in November as Bitcoin hit a new all-time high, the stock is currently trading over 60% below its price. initial.

Despite Coinbase’s struggles, Binance can learn from the exchange’s first year on Wall Street. Most notably, Coinbase’s moves closely tracked Bitcoin’s performance and the entire cryptocurrency industry’s market capitalization.

With that in mind, the two to three year time frame for Biance.US’ IPO may be telling. Bitcoin’s halving cycle, which is timed to reduce the volume of BTC given to miners by 50% on a roughly four-year basis, has historically resulted in rallies that have led to new all-time highs for a number of cryptocurrencies.

Maxim Manturov, Head of Investment Advisory at Freedom Finance Europe, notes that “Cryptocurrency prices will be influenced by two key multi-directional factors. On the one hand, cryptocurrencies are increasingly embedded in economic relationships across the global economy. With their enormous potential, crypto exchanges are valuable long-term investments. In the short term, however, investing in it is somewhat risky. This year has been a year of widespread rate hikes by central banks, particularly the US Federal Reserve. Such actions by regulators are always accompanied by a sell-off in tech companies, which includes crypto exchanges. This was one of the key factors in Coinbase’s decline. Therefore, it is possible that we will see the price of and Binance securities decline within a year of the IPO.”

With the next Bitcoin halving event scheduled for 2024, Binance’s upcoming IPO could come at a time when the industry is ripe for growth and adoption.

Binance’s big ambitions for the future of crypto

Binance, the parent company of its US branch, has also flirted with the idea of ​​launching an IPO in the future, but founder and CEO Changpeng Zhao speculated that as a much bigger company , much more research would be needed to determine where it could become a publicly traded company.

Speaking at a forum in Singapore in November 2021, Zhao noted that the company’s future may involve more of a hybrid approach to crypto and traditional equities. “To be honest, in five, 10 years, we could see crypto exchanges merging with stock exchanges,” Zhao explained.

However, Zhao was also keen to downplay his involvement in Binance’s US division, pointing out that he merely sits on Binance.US’ board and is not heavily involved in the decision-making process.

Binance.US’ forward-looking listing represents the latest step the cryptocurrency industry has taken toward broader acceptance. While the company likely has ambitions to perform better in its first year than Coinbase, following in its rival’s footsteps, we can see a growing trend of cryptocurrency companies flocking to Wall Street.

If Zhao’s prediction that crypto and traditional stocks could eventually merge, it will be up to companies like Binance to bring cryptocurrency into the mainstream.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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