The CEO of Ripple, Brad Garlinghouse, recently said that he believes crypto IPOs will be something to watch in 2020. What’s more, Garlinghouse went on to suggest that Ripple may itself launch an initial public offering (IPO) in coming months.
Will Ripple launch an IPO in 2020?
These comments came during the ongoing World Economic Forum (WEF) conference in Davos, on January 23rd. Moreover, cryptocurrencies, blockchain technology and CBDCs are proving to be some of the top talking points at Davos.
Garlinghouse appears to be continuing this trend. Specifically, the Ripple CEO reportedly said that Ripple may soon launch its own IPO. Additionally, he was also heralding cryptocurrency and blockchain IPOs as potentially big trends for 2020:
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… It’s a natural evolution for our company.”
As such, it appears that an IPO appears to be on Ripple’s horizon. The “natural evolution” Garlinghouse mentions is presumably the fact that the cryptocurrency and blockchain industry is maturing rapidly. Consequently, the desire to raise capital through traditional capital markets likely increases.
For those unfamiliar with the term, an initial public offering (IPO) is the issuance of company shares to the public. This means that investors can purchase a part, or equity, in the firm. IPOs are a common occurrence on the stock market.
IPOs could lend crypto firms legitimacy and build confidence
Moreover, an IPO is the first time a company issues its shares to the public. As such, the company is generally untested on the capital markets and investors can, therefore, often buy shares at a comparatively low starting price.
Nevertheless, the cryptocurrency industry has not seen many IPOs before. Instead, many crypto companies prefer the route of ICOs, or initial coin offerings. These function roughly the same way as IPOs – with the difference being that ICOs instead issue tokens instead of shares.
As the cryptocurrency market matures, however, IPOs will likely become increasingly common. In the past week, Toshi Times reported how the Swedish crypto exchange BTCX is preparing for an IPO in the first half of 2020.
An IPO offers cryptocurrency companies a more traditional way to raise capital. Furthermore, legacy investors will likely prefer holding equity stocks to holding coins or tokens. IPOs could also allow cryptocurrency and blockchain companies to build confidence and legitimacy.
The past few years’ ICO craze, with some ICOs failing or being outright malicious, could also lead companies towards IPOs. With that said, the requirements for IPOs are more stringent than for ICOs. As such, it will be interesting to see if and when Ripple launches its IPO.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.