Binance.US signals incoming IPO with funding round
Bleeding Robinhood isn’t going to like this news. Binance.US — a sibling company of Binance.com (international) — raised a major funding round, accelerating its US growth with plans to go public:
- Raised $200M at a valuation of $4.5B.
- Targeting an IPO within 2-3 years.
- Plans for new products and services.
But don’t mistake Binance.US for the international Binance.com — the largest crypto exchange globally. Changpeng Zhao founded both, but they operate as two separate companies — with the US entity licensing its tech from the international entity.
With its new funding, Binance.US has one focus — growth — which could mean trouble for existing US trading apps…
Trouble incoming: US exchanges like Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN) have already seen their sales impacted by lower crypto trading volumes. Incoming competition could hit their profitability, making matters worse.
Binance US’ trading volume is nearly a tenth of Coinbase’s, but trading fees are much cheaper on Binance — 0.1% vs. 0.6% (TC).
In January, Mizuho analyst warned Coinbase could face pressure to reduce fees. Yesterday, they lowered $COIN’s price target from $220 to $190 (14% upside from yesterday’s closing price).
- Coinbase makes most of its sales from trading fees but is trying to diversify away.
- Coinbase’s stock price mirrors Bitcoin’s token price — and we know how volatile $BTC can be.
Mizuho also has a pessimistic outlook on Coinbase’s upcoming NFT marketplace — expecting it to invest $300M into an unpredictable market (Coindesk).
Finding alternatives: There’s more than one way to get exposure to crypto while avoiding crypto exchanges or directly holding tokens.
Investment fund ‘Off the Chain Capital’ uses a value approach to invest in undervalued crypto investments — seeing value in Silvergate (NYSE:SI), a crypto-focused bank (CNBC).