Cryptocurrencies and blockchain technology are going through a transition period. The time of novelty and skepticism has come to an end but now there are other, bigger issues at hand. While crypto funds are getting more popular with more trusting clients every day, there is also no clear path for their development.
Over the last year, crypto companies started to look for ways to increase their engagement, get more people on board while offering better services, more security and opportunities. While the initiative seems pretty harmless, the industry has been faced with countless challenges coming at them from all sides, demanding changes and partnership, even on topics that cryptocurrency can’t really compromise.
The industry has been gaining more legitimacy but so far this hasn’t helped with the favorable attitude from the regulatory bodies, that keep questions the cryptocurrencies and what goes on behind the scenes. It has been a struggle for the two to find common ground but there might be change on the way, with one of the leaders in the industry announcing that the major IPOs are one their way.
Why did it take so long?
You might be thinking that with all the buzz that the cryptocurrencies have been getting they should have started thinking about IPOs a long time ago. And truth be told there were quite a few efforts from these companies to go public but the response has consistently been underwhelming. This isn’t to say that people actually aren’t interested in cryptocurrencies, but still, a year or two ago the attitudes towards the industry were completely different from what they are now, which is why the timing might actually be right this time. Even some of the most famous crypto funds, who had large support from the community and had a trustworthy name faced the challenges of failed IPO so this further discouraged the others to follow that example.
But now the scene is set a bit differently.
The cryptocurrencies have been getting more mainstream, becoming accessible to outstanding forex brokers around the U.S, Europe, and even new markets and becoming an essential part of the payment systems.
The adoption rates are up, trading is a lot safer and there is generally more knowledge around the subject. Basic on the different circumstances 2020 is shaping up to be the year when Crypto companies will finally manage to make their first successful IPOs. The main challenge besides the trust was always the fact that companies are forced to disclose all of their financial situations completely, which is something crypto companies usually don’t do. Their approach has always been prioritizing the profit and taking care of things like financial disclosure later. But not, after Davos, which is one of the most prestigious financial gatherings, we can be assured that major change is coming in this direction. The owner of one of the biggest crypto companies, Ripple, stated that they would be among the first ones to go public this year.
Ripple’s ambitious plan
Ripple has been around since 2012 when the cryptocurrencies were just starting to get popular. Over the years the company developed into one of the leading crypto funds. Ripple has previously hinted at the possibility of the IPO so the community wasn’t all that surprised but this time the circumstances are different and there might be the demand that the crypto companies have always wanted. This move on Ripple’s part might be an indication that the market conditions are on the rise and will be drastically improved in no time. The company is said to increase the demand for XRP. The company’s main income comes from programmatic sales of XRP, which means selling XRP to crypto exchanges. But besides that, Ripple also has some powerful backers who have been with the company since the beginning. Over the years their funding increased to almost $200 million. The company has been able to consistently raise money which leads the company to believe the time has finally come for the IPO. While the company has tried its hand at this before, teasing the alleged timing for going public, this year they have raised a record amount of funding, strengthening their confidence in the success of the future IPO. Since Ripple has consistently stayed as a leader of the community, creating trends in the industry and setting examples, it’s not to far off to assume that it might be the first crypto company to actually have the successful IPO that actually lives up to all the hype that surrounds cryptocurrency and company itself.
The future trend
If Ripple’s action turns out to be as successful as the company’s executives hope it to be, then other companies will also feel more inclined to take the same route. But just because Ripple has had a successful year and the attitudes towards the industry are changing does not guarantee a successful IPO. In previous cases the confidence of the companies wasn’t lacking either. Sometimes these moves can bear the most unpredictable consequences, leaving the companies questioning their entire user base and their future. So even though, this time the circumstances are different, there are still doubts within the industry professionals and the potential clients that Ripple will be able to successfully pull that off. At least the previous cases serve as an example of just how fragile the industry still is. The companies might be getting $100 million of funding but taking a step like this could still leave the companies feeling vulnerable. The fact that the firm that is thinking about this step is already secure enough when it comes to funding and their reputation makes the situation feel much more realistic and helps the market to gain even more legitimacy and trust, from the people, increasing its influence and popularity, something that all crypto companies could use more of.
While the industry has definitely grown and developed, there is a long way to go if the market wants to use its full potential
IPOs can do a lot to change the state of the cryptocurrency market, the change that could also better its relationship with regulatory bodies and officials and open many more doors to crypto firms. In case of success with Ripple we could be looking at an entirely different future for the crypto world.