12 July 2021

Market commentary: A closer look at IPO valuations in crypto assets

Patrick Heusser

Patrick Heusser

Head of Trading at Crypto Broker AG

About the author

Things that make you go hmmm…

In this case, the valuation of the newly announced IPO of “Bullish”: $9 billion.

Let’s quickly break it down: it is pretty straightforward. There are only two components involved in the valuation of the company:

  • The crypto holdings (roughly $6bn)
  • The value you assign to the newly launched exchange Bullish (valued at $3bn, which then adds up to the $9bn valuation)

So, in order to decide whether or not Bullish should be valued at $3bn, we need to have a quick look at the business model. It is also pretty straightforward.

Bullish is a centralised exchange with one difference that makes it stand out. It will provide liquidity via an AMM, equipped with their own capital. Press info is here and here.

For all of you who have some experience with the IL (impermanent loss) risk of an AMM (like me…), you might be seeing some issues with this $3bn valuation.

The trading desk is ready as always for a chat – about this and other topics. Simply reach out.

Have a good trading week!

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