The Crypto IPO Wave Has One Big Problem: Bitcoin Is Still in Charge

Why It Matters

Investors must assess the cyclicality of exchange earnings, as Bitcoin’s volatility directly impacts valuation and profitability, differentiating crypto infrastructure from traditional financial firms.

Key Takeaways

• Circle raised $1.05B at $8B valuation, showing institutional appetite
• Gemini IPO fell 75% after Bitcoin rally ended, exposing revenue fragility
• Kraken paused IPO despite $648M revenue, citing weak Bitcoin activity
• Exchange fee income tracks Bitcoin price, making earnings cyclical
• Stablecoin firms like Circle have revenue streams less tied to market swings

Pulse Analysis

The 2025 crypto IPO wave began with Circle and Bullish delivering multi‑billion‑dollar listings that convinced Wall Street the sector had matured. Their successful pricing—$31 and $37 per share respectively—signaled strong institutional demand for regulated crypto exposure, especially stablecoin and payment infrastructure. Yet the excitement masked a deeper dependency: most exchanges still earn the bulk of their fees from spot trading, which spikes only when Bitcoin’s price surges.

Subsequent performance has underscored that dependency. Gemini’s IPO, initially priced at $28, tumbled more than 75% after Bitcoin’s rally faded, and the firm disclosed a $282.5 million H1 loss. Kraken, despite reporting $648 million in revenue and $178.6 million adjusted EBITDA during a Bitcoin‑driven boom, froze its IPO plans as the market cooled. Kaiko’s data confirms that trading volume, new listings, and public‑market valuations rise and fall in lockstep with Bitcoin, challenging the narrative that exchanges are neutral infrastructure providers.

For investors, the key question is whether exchanges can diversify revenue beyond Bitcoin‑linked trading fees. Stablecoin issuers like Circle generate income from reserve yields and payment services, which are less volatile and more akin to traditional financial infrastructure. In contrast, exchange operators must prove sustainable earnings through derivatives, custody, institutional services, and staking to earn CME‑style multiples. Until quarterly reports demonstrate such diversification, Bitcoin will remain the sector’s de‑facto underwriter, shaping the viability of future crypto IPOs.