A look at cryptocurrency exchanges seeking IPOs

By Tanay Ved & Victor Ramirez, Source: Coin Metrics, Compiled by Shaw Jinse Finance. Key Points: Kraken, Gemini, and Bullish are preparing to go public amid a favorable regulatory environment and investor appetite for public market investments. Coinbase set the benchmark with its 2021 initial public offering (IPO), boasting a $65 billion market capitalization upon listing. At the time, 96% of its revenue came from trading fees, but by the second quarter of 2025, subscriptions and services accounted for 44%. Among these exchanges, Coinbase leads with 49% of spot trading volume. Bullish and Kraken each account for 22% and are rapidly expanding into new businesses. Not all reported trading volume is created equal. Round-trip analysis highlights instances of exaggerated trading activity on some platforms and underscores the need to assess exchange quality and transparency. Introduction: Throughout its existence, successive US administrations have been either indifferent or hostile to the cryptocurrency industry. But last week marked a constructive shift. The White House Digital Asset Task Force released a 166-page report outlining the current state of digital assets and proposing policy recommendations for building a comprehensive market structure. Meanwhile, US Securities and Exchange Commission (SEC) Chairman Paul Atkins introduced the agency's "Project Crypto" initiative in a public speech. The initiative aims to make the United States the "capital of cryptocurrencies" by bringing financial markets to the blockchain, streamlining the burdensome licensing structure for crypto businesses, and promoting the creation of financial "super apps" offering a wide range of services. The primary beneficiaries of this new regulatory regime are centralized exchanges. Several private centralized exchange businesses, such as Kraken, Bullish, and Gemini, are seizing this relatively favorable environment to pursue initial public offerings (IPOs). As these companies open up to public investment, it's crucial for investors to understand their underlying drivers. In this article, we will analyze key metrics for evaluating these exchanges and highlight some caveats when using exchange-reported data. The Crypto Exchange IPO Boom: Following Coinbase's initial public offering (IPO) in April 2021, cryptocurrency-related IPOs have stagnated over the past four years (largely due to the previously adversarial relationship between cryptocurrency companies and the U.S. Securities and Exchange Commission). As a result, private companies are unable to access liquidity in public markets, and non-accredited investors are unable to benefit from investing in these businesses. With the Trump administration promising a friendlier regulatory regime, a new wave of private cryptocurrency companies have announced their intention to go public. This environment, combined with a renewed desire for public market exposure, has spawned some of the most explosive IPOs, such as Circle's recent listing. Gemini, Bullish, and Kraken are also considering listing in the United States, hoping to capitalize on this opening window and position themselves as full-stack providers of digital assets. Coinbase's 2021 initial public offering (IPO) provides a useful benchmark for assessing the investment prospects of potential exchange IPOs. The company conducted a direct listing on Nasdaq on April 14, 2021, with a reference price of $250 per share, implying a fully diluted valuation of $65 billion, after opening at $381. Coinbase’s listing came at the height of the 2021 bull run, when Bitcoin was trading near $64,000 and exchange volume exceeded $10 billion. As outlined in its S-1 filing, Coinbase’s business model at the time was simple, with the vast majority of its revenue coming from facilitating transactions: “Since inception through December 31, 2020, we have generated over $3.4 billion in total revenue, the majority of which comes from transaction fees generated by retail and institutional clients based on trading volume on our platform. For the fiscal year ended December 31, 2020, trading revenue accounted for over 96% of our net revenues. We are leveraging the strength of our trading business to scale and expand our platform by investing in our flywheel, launching new products and services, and growing our ecosystem.” Source: Coin Metrics Market Data Pro and Google Finance. Coinbase now looks more like a "full-service exchange." While trading remains the core of its operations, its business model has significantly expanded to include the entire cryptocurrency services chain. This shift is beginning to manifest in the relationship between stock price and exchange trading volume, which used to be closely correlated in the early days.

However, this correlation has weakened as the relevance of “Subscription and Services Revenue,” which consists of stablecoin revenue (USDC interest income), blockchain rewards (staking), and custody revenue, has increased:

Coinbase Q1 2021

• Revenue $1.6B

• $1.55B (96%) Trading Revenue

• $56M (4%) Subscription and Services Revenue

Coinbase Q2 2025

• $1.6B in Revenue

• $1.55B (96%) Trading Revenue

• $56M (4%) Subscription and Services Revenue list-paddingleft-2">

• Revenue of $1.5 billion

• $764 million (51%) Trading revenue

• $656 million (44%) Subscription and services revenue

• $77 million (5%) Corporate equity

Comparative study of upcoming IPO exchanges

Based on this framework, we list the estimated valuations, trading volumes, and business sectors of upcoming exchanges. While the services offered by these exchanges are converging, there are significant differences in their market share and trading volumes.

Since its launch in 2013, Kraken appears to have reached a higher stage of maturity.

Source: Coin Metrics Market Data Pro and public company filings (data as of August 1, 2025)


While the services provided by these exchanges are converging, there are still significant differences in their market share and trading volumes.

Since its launch in 2013, Kraken appears to have reached a higher stage of maturity.

Source: Coin Metrics Market Data Pro and public company filings (data as of August 1, 2025)


The company is experiencing strong financial growth, projecting revenue of $1.5 billion in 2024 (a 128% increase from 2023) and $412 million in the second quarter of 2025. Kraken has also strategically expanded, acquiring NinjaTrader, securing a European MiCA license, and expanding its tokenized equities, payments, and on-chain infrastructure (Ink) businesses. With a target valuation of approximately $15 billion and $1.5 billion in revenue for 2024, Kraken trades at a price-to-earnings ratio of 10, slightly lower than Coinbase's 12.7. Gemini, by comparison, operates on a smaller scale. Its average trading volume over the past year was $164 million, the lowest among these exchanges. Gemini's most recent valuation was $7.1 billion in its 2021 Series A funding round, while private market valuations put it at $8 billion. In addition to its spot and derivatives businesses, Gemini offers staking and credit card products, providing yield on user deposits, and is the issuer of the Gemini Dollar (GUSD), whose circulating supply has fallen to 54 million. Bullish, with an average trading volume of nearly $1.95 billion over the past year, ranks among the top exchanges in terms of trading activity. The exchange is the core of its trading and liquidity infrastructure. As an institutionally focused exchange, it is regulated in Germany, Hong Kong, and Gibraltar, and is actively pursuing a US license. Bullish has also expanded into information services with the acquisition of CoinDesk. In its F-1 filing, the company disclosed a net profit of $80 million and a net loss of $349 million in 2024. Initially valued at nearly $9 billion based on a canceled SPAC transaction in 2022, Bullish is now reportedly seeking a valuation of $4.2 billion. Overall, Coinbase and other exchanges preparing for IPOs only account for approximately 11.6% of the reported spot trading volume on trusted centralized exchanges. Binance alone accounts for 39%, while other offshore exchanges also have a significant share. Looking only at exchanges of interest, Coinbase accounts for 49% of spot trading volume, followed by Bullish and Kraken, each with 22%. Bullish has steadily increased its share since its launch in 2022, while Kraken's share has shrunk as competition has intensified. Source: Coin Metrics Market Data Pro

Examining Economic Activity Across Exchanges

As we’ve seen above, trading volume is one of the most predictive metrics for estimating valuations. However, reported trading volume can be misleading depending on the exchange.

While most major cryptocurrency exchanges have cracked down on wash trading, some havens remain. Our Trusted Exchange Framework methodology details how to detect anomalous trading activity, as well as an assessment of qualitative factors such as regulatory compliance.



Source: Trusted Exchange Framework


We have developed a more effective signal for detecting wash trading by counting the frequency of round-trip trades. Our testing methodology is as follows:

• We randomly selected 144 5-minute time periods between January and June 2025, covering nearly 20 million trades.

• For each exchange and time period, we selected one trade.

• If a trade occurred within 10 trades or 5 seconds of the previous trade in the opposite direction, with a nearly identical amount (less than 1%), and at a nearly identical price (less than 1%), we marked both trades as round-trips.

• We repeated this process for each trade. If a trade had already been marked as a round-trip, we skipped it. Calculate the volume of transactions marked as round-trips and divide it by the total volume. In the figure below, we plot a sample of transactions from a few exchanges during a specific time period, highlighting which transactions are suspected to be round-trips. Each gray dot represents a normal transaction, and each green and red mark represents a round-trip transaction. Due to the approximate nature of this methodology, we expect some false positives in round-trip trades that are the result of normal market activity (e.g., market makers facilitating trades by providing liquidity on both the buy and sell sides of the order book). However, the high proportion of round-trip trades relative to industry benchmarks such as those shown by Crypto.com and Poloniex raises concerns about the reliability of their reported volume data. Specifically: In Q1-Q2 2025, we estimate Crypto.com’s trading volume to be approximately $720 billion, split between BTC-USD ($201 billion), BTC-USDT ($192 billion), ETH-USD ($165 billion), and ETH-USDT ($160 billion). Based on the percentages estimated above, we estimate $160 billion of volume across these pairs comes from round-trip trades. Conclusion: With several cryptocurrency exchanges about to go public, it's in investors' best interest to understand the relative strengths and weaknesses of these platforms. While trading volume helps estimate trading revenue (which remains the primary source of revenue), qualitative factors such as business diversification, the presence of proprietary trading, and regulatory compliance are also crucial in assessing an exchange's quality. These factors can help market participants determine whether valuations are justified. Coinbase maintains its leading position four years after its IPO, largely due to its successful diversification of revenue streams into areas such as custody, stablecoins, and Layer 2 network fees. However, competition in the exchange market is intensifying. To compete, other exchanges must expand their revenue streams beyond trading-related fees, which are highly correlated with market sentiment and exhibit strong cyclicality. As market structure becomes clearer, exchanges are being allowed to transform from mere trading venues into full-fledged super-applications. How these exchanges seize this opportunity, whether they can realize their vision and achieve the same success as past breakthrough IPOs, will be interesting news to watch next year.