Messari Daily Brief Feb 23, 2021 - CoinShares Shares Coin

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Are you ready for some crypto IPOs!

It looks like CoinShares will be the first major crypto asset manager to list publicly. Yesterday, they announced their intention to IPO on the Nasdaq First North Growth Market in Sweden with a target for March 11th under the ticker "COIN". (In addition to announcing a new DeFi Index token.) The prospectus shows two interesting things.

1. The revenue / profit figures are a bit wonky given reporting requirements for assets traded / under management, but looking at “Comprehensive Income” and changes to shareholder equity are the items to keep an eye on. CI for the first nine months of 2020 eclipsed full-year 2018, and we know anecdotally, that asset managers generally saw a doubling of first nine months revenue in Q4, with another likely double from there in Q1. That likely puts CoinShares at $30mm EBITDA for 2020, and $60mm run-rate. Given where Coinbase is expected to price, a 50x multiple on run-rate EBITDA seems possible, if not conservative for CoinShares. The company might come out at a $3-5 billion valuation with a target trading date of March 11.

2. If you want to get a sense for valuations of the *other* crypto asset managers, then you can take the March trading data and use CoinShares AUM as a proxy for the value of the other services. CoinShares actually tracks this in a weekly digital asset fund flow report. You can multiply CoinShares IPO valuation by 10-15 to get DCG’s fair value, or divide by 5 if you want to price Bitwise’s next megaround (who just this morning announced that they had cleared $1 billion in AUM themselves). It’s a good time to be hoovering up AUM and selling the vacuums.

My sense is that these new crypto IPOs are going to add reflexivity to the already-hot crypto markets (this morning’s correction notwithstanding). Hot IPOs mean more interest in the underlying. More spot bidding, means more AUM and revenue for the newly public companies. I’m holding (but not levering!!) over here at diamond hands capital, and will try not to throw up along the way due to altitude sickness.

Headlines that matter

• INTEL: USDT, LEO, Nervos, Crypto.com, NuCypher, XRP, KEEP (+ 20 updates)
• The NY Attorney General settles with Tether for $18 million (FUD is over)
• Galaxy to launch research unit led by Fidelity alum (The Block)
• India’s “Warren Buffett” backs bitcoin ban (CoinDesk)
• Gary Gensler nomination set for March 2 (The Block)
• DeFi liquidity provider snags $2 million (CoinDesk)
• Centrifuge raises $4.3 million from Galaxy for a DeFi bridge to real-world assets (CoinDesk)
• ECB wants to be able to veto stablecoins like Diem (CoinDesk)
• HEAT: All about the NFT market from Mason
• SHADE: Balaji: BTC is the obvious long-term reserve alternative