Crypto and blockchain companies are attracting billions of dollars as major investments continue in the industry in 2021. Coinbase and Kraken have each had an incredible number of fundraising plans, with a previous plan to post a live listing and the latter preparing for a lucrative fundraising round.
Since the official announcement of its plans for a public listing, Coinbase has been valued at nearly $ 28 billion by cryptocurrency analytics firm Messari. Meanwhile, news of Kraken’s efforts to lure investment from private companies in a new round of fundraising insiders estimated at $ 10 billion or more.
The high value of these investments lends credence to the growing popularity of cryptocurrencies, which have a combined market value of nearly $ 1.5 trillion. While investors have ventured directly into the cryptocurrency markets, others are looking for opportunities to connect with the largest companies in the ecosystem with the potential for a large return on investment in the future.
Kraken says the $ 10 billion valuation is low
Cointelegraph is reaching out to Kraken to reveal plans for new fundraising efforts in 2021, given that the last 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 allegedly include Fidelity, Tribe Capital and General Atlantic. A company spokesperson told Cointelegraph that the numbers in the initial reports may underlie Kraken’s actual value: “We wouldn’t speculate too much on the value of the company, but the $ 10 billion would be a low estimate for us.”
Kraken also declined to provide details of how it used the capital raised from investors, but indicated that it is in a very strong financial position and has garnered great interest from potential lenders, and a spokesperson said: “We’ve got” Kraken positively flowing cash and a very good budget. . If we raise new capital, it will be either for strategic reasons or to speed up acquisitions. ”
A company spokesperson also agreed that the desire to invest in companies like Kraken is further legitimizing the cryptocurrency and blockchain space as a growing sector that is shaping the future of financial and payment systems, adding:
“The cryptocurrency industry has reached such a level of maturity and general acceptance that it makes sense to enter the public markets. However, this is still true in the early days; for example, Kraken is unlikely to consider sailing until 2022 at the earliest. Appreciation. ”
Lessons from the past
Three decades have passed since the advent of the Internet in the world, and the first years can be compared to what is happening in the cryptocurrency and blockchain industries. Many companies attracted large investments and went nowhere, while companies like Amazon continued to become the world leader in space.
A similar trend was observed during the increase in the number of first offers of coins in 2017, when some companies with incomplete ideas attracted large investments, but were not able to implement the projects they had started. However, others have continued to create products and services that have had a lot of success while many of the largest cryptocurrency exchanges and payment service providers remain thriving.
Matte Greenspan, founder of crypto consulting firm Quantum Economics, told Cointelegraph that a parallels could be drawn between the early days of the internet in the 1990s and the birth of the blockchain and crypto room in the 2010s. As Greenspan explained, future-minded investors must ultimately weigh the potential risks and rewards of investing in emerging markets and technologies:
“It’s funny how big companies tend to resist new technologies. In the late 1990s with the advent of the internet, and during the 1920s with the advent of the blockchain, we saw this kind of five-stage adoption. Ultimately, those who embrace new technologies carry risks, but the benefits. It’s often enormous. ”
Computer scientist Xinshu Dong, who co-founded the blockchain-enabled platform Zilliqa, echoed Greenspan’s view of the similarities between the dotcom bubble and recent developments in cryptocurrency.
Dong told Cointelegraph that some investments were made based on speculative estimates and uncertain market demand during the 2017 ICO period and in the current cryptocurrency market: “When the Dot Com bubble burst, 51% of the tech startups closed and $ 1.7. T’s capital dried up. He added that while some companies, such as Pets.com, had closed the store, others, such as Amazon, Qualcomm and Cisco had grown significantly because they “provided services everywhere that were disrupted, albeit massively.”