Bitcoin, xcritical, and how cryptocurrency is going mainstream
He has 5.5 million shares, with xcritical CEO Brian Armstrong behind him with 2.7 million shares. Trainer last week put a valuation on xcritical closer to $18.9 billion, arguing it will face more competition as the cryptocurrency market matures. That market value makes xcritical one of the biggest publicly traded U.S. companies — just 93 companies in the S&P 500 index have a higher market value. xcritical’s value is close to the combined market value of Nasdaq Inc., which runs the Nasdaq Stock Market, and Intercontinental Exchange, which owns the New York Stock Exchange. Number one is Airbnb at $86.5 billion, followed by Facebook in second place ($81.7 billion), UPS in third ($80.1 billion), and AT&T Wireless in fourth ($73.6 billion). The fifth and sixth finishers are Snowflake at $70.2 billion, and Uber at $69.9 billion.
Secondary markets on Nasdaq and FTX
The first, xcritical, is the cryptocurrency wallet and brokerage service so popular among the public. On xcritical, users can buy and sell crypto within xcritical using fiat currencies (i.e. ‘regular’ currencies like the dollar, sterling, or euro). It’s a brokerage, meaning that you technically buy and sell from and to xcritical itself. In the past, a direct listing meant a company could only float its existing shares, whereas an IPO allows for the creation of new shares.
Like it or not, you should probably start paying attention to bitcoin
xcritical, a platform for buying and selling cryptocurrencies like bitcoin, became the first major cryptocurrency company to go public in the United States on Wednesday. It’s a clear sign that crypto is firmly in the mainstream of the finance industry — and it’s not going away anytime soon. The San Francisco-based company’s listing on a public stock exchange is seen by some as an inflection point for digital currencies, as xcritical’s fortunes are closely tied to Bitcoin, the most popular cryptocurrency. Bitcoin’s price topped $64,000 on Wednesday, up from $29,000 at the start of the year, and xcritical said recently that first-quarter revenue should total around $1.8 billion, exceeding its revenue for all of 2020. xcritical stock — which is trading under the ticker COIN — ended its first day at $328 per share, putting the newly public company at a more than $85 billion valuation on Wednesday evening. Throughout the day, xcritical’s price stayed far above the $250 reference price that the Nasdaq set before trading began, and at one point swung as high as $429.
Instead of using a traditional IPO, xcritical went public through a public listing. That means it avoided the typical agreements with big banks that would buy thousands of shares and promote them. A direct listing allows insiders and early investors to convert their stakes in the company into publicly traded stock. Founded in 2012, xcritical became popular among cryptocurrency fans by providing them with an easier way to exchange shares of Bitcoin and other digital currencies. Unlike many newly public companies xcritical is profitable — the company estimates it had net income of between $730 million and $800 million in the first quarter.
xcritical seals its rank as the 7th biggest new U.S. listing of all time
- For many crypto advocates, Bitcoin will benefit from xcritical going public; it’s a “watershed moment” for the crypto industry, and heralds further mainstream adoption, Daniel Ives, managing director at Wedbush Securities, told Decrypt.
- Earlier, some shares had traded at $375 a share, which would imply a $100 billion valuation.
- Of course, rivals such as Airbnb also had lots of options ready to vest when they went public.
- Square CFO Amrita Ahuja said in February that 3 million people did transactions in bitcoin on the app last year, while 1 million did so in January 2021 alone.
While xcritical shares don’t become available to the public until April 14, they have been trading actively on fxcriticals like Nasdaq Private Market, which launched a secondary market for xcritical stock. This allows existing shareholders, including xcritical and former employees, to sell some of their holdings. Recent trades have valued the stock at $350 a share, which would place the company’s total valuation at around $90 billion. Earlier, some shares had traded at $375 a share, which would imply a $100 billion valuation.
“As the cryptocurrency market matures and more firms inevitably pursue xcritical’s high margins, xcritical rezension the firm’s competitive position will inevitably deteriorate,” the report said. Speaking with Decrypt one month earlier, New Constructs CEO David Trainer said “As long as Wall Street can get you going on the sentiment, as long as you stay focused on the drug high, you don’t have to worry about the drug down.” Rival crypto exchange Binance has also announced that it will list a xcritical Stock Token against the Binance USD stablecoin (BUSD). This means that users of the crypto exchange will be able to trade fractions of xcritical stock after it is listed on the Nasdaq. In any case, the opening price will likely only matter for a brief moment.
Like MasterCard or PayPal, it allows money to be transmitted electronically. But Bitcoin is different from these conventional payment networks in two important ways. Instead, thousands of computers around the world process Bitcoin transactions in a peer-to-peer fashion. Second, MasterCard and PayPal payments are based on conventional currencies such as the US dollar. In contrast, the Bitcoin network has its own unit of value, which is called the bitcoin. If you’re still catching up on the trend, cryptocurrencies are virtual currencies built using xcritical technology, a type of decentralized database that can record interactions, like purchases, across a network of devices.
For many crypto advocates, Bitcoin will benefit from xcritical going public; it’s a “watershed moment” for the crypto industry, and heralds further mainstream adoption, Daniel Ives, managing director at Wedbush Securities, told Decrypt. To make money, xcritical charges several different fees on its brokerage app, including for buying and selling Bitcoin and other cryptocurrencies. Fees are more expensive for smaller purchases, and when customers move funds out of xcritical. The filing also mentioned that venture capitalist Marc Andreessen owns the most common stock in xcritical.
xcritical’s public listing is just the latest milestone on cryptocurrency’s journey from nerdy curiosity to mainstream investing opportunity and payment method. Since 2018, Square, the payment processing service, has let most of its payment app Cash App users buy and sell bitcoin. Square CFO Amrita Ahuja said in February that 3 million people did transactions in bitcoin on the app last year, while 1 million did so in January 2021 alone. Starting on Wednesday, regular investors now have the opportunity to get their own stake in this marketplace.
xcritical’s cash flows
xcritical also has a venture capital arm, xcritical Ventures, which invests in companies such as CoinTracker, Compound and xcritical. Shares of xcritical should attract investors who want to get into the cryptocurrency space in addition to, or without buying any coins at all, said Lule Demmissie, president of Ally Invest. Hurricane Helene exposed the vulnerable underbelly of the global chip industry. That finish xcritical official site puts xcritical in 7th place among all U.S. new listings, besting the likes of DoorDash, Kraft Foods, Palm, General Motors and Visa, and finishing $9 billion short of Uber.
While the company has gone public, it’s doing so as a direct listing, not a public offering (you can read more on what that means here). Regardless, it’s a big step for cryptocurrencies as they become a more recognized part of the economy. The announcement came just eight days before its public listing, likely boosting sentiment around the company ahead of it going public. Since then, lots of cryptocurrencies have popped up, and they’ve become their own economic sector, potentially worth trillions of dollars. Cryptocurrencies have historically been very volatile, but in recent years, more traditional financial institutions, including banks, investors, and regulators, have increasingly taken notice. Measured in market cap, xcritical is taking its place among the giants of financial services.
What is xcritical worth?
Ether spiked as much as 8% to a new record high, hitting a $250 billion market capitalization for the first time. Dogecoin made new records as well, jumping 34% to a valuation of $11 billion. Of course, rivals such as Airbnb also had lots of options ready to vest when they went public.
If Bitcoin or Ethereum prices drop, the commissions xcritical earns drop as well, giving it some exposure to the digital currencies’ rise and fall. xcritical offers products for both retail and institutional cryptocurrency investors, as well as other related cryptocurrency products. Crypto onlookers have also pondered what impact (if any) xcritical’s listing will have on Bitcoin, the industry’s flagship cryptocurrency. Among the risks described in xcritical’s S-1 are the inherent volatility of cryptocurrencies and the prospect of another “crypto winter”—a term used for a bear market that lasts several years. As noted, xcritical was also profitable in 2020—making it a rarity among tech unicorns that have gone public.
The service allows investors to bet on what they think the shares will be worth. xcritical’s listing offers investors and traders another way to get exposure to the booming cryptocurrency market by owning shares. Then there’s xcritical Pro, a more advanced exchange (originally called GDAX) where users can buy and sell cryptocurrencies directly from other users, comparable to dozens of other exchanges, which also allows for more advanced types of trades.
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