Crypto firm Kraken seeks to double its valuation to $10 billion as trading in digital assets skyrockets
- Kraken is one of the oldest cryptocurrency firms and has nearly 60 cryptocurrencies available for trading on its platform.
- It seeks to more than double its valuation after trading in digital assets skyrocketed.
- The company revealed that the trading volume in January this year alone was more than the entire volume of 2019.
- Check out the latest news and updates on Business Insider.
According to a Bloomberg News report, Kraken is in talks with financial services company Fidelity, venture capital firm Tribe Capital and investment firm General Atlantic. The report added that the valuation may cross $10 billion in this round, but other terms of the discussions are not known yet.
San Francisco-based Kraken, founded in 2011, is one of the oldest cryptocurrency firms. It has 59 cryptocurrencies available for trading on its platform.
AdvertisementThe jump in Kraken’s valuation comes at a time when trading in digital assets – including cryptocurrencies – is skyrocketing. Kraken revealed that $56 billion worth trading was done in January this year – more than the entirety of the volume traded in 2019.
Cryptocurrency firms generate revenue from the transactions undertaken on their platform, in the form of transaction fees. As more retail investors plough their money into cryptocurrencies, more transactions are undertaken, leading to a growth in revenue of these firms.
Kraken noted that it witnessed over a 1000% increase in sign-ups in the first week of February – when prices of Bitcoin were on a surge, making record highs and crossing $58,000.
While Kraken is one of the oldest cryptocurrency firms, it is still not the biggest. It comes in at the fifth position, according to cryptocurrency analytics aggregator CoinMarketCap.
Here are the top cryptocurrency firms as on Feb 26, 2021:
AdvertisementKraken rival Coinbase is valued at $100 billion
While Kraken is seeking a $10 billion valuation, its much larger rival Coinbase is going for a direct listing on the Nasdaq stock exchange. A recent sale of its shares in the private market reportedly valued the company at over $100 billion.
Coinbase says it turned profitable last year as retail interest in cryptocurrencies increased. It reported net revenue of $1.1 billion in 2020 and a profit of $322 million, after reporting a loss of $30 million in 2019.
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