By 2015, xcritical had reached one million users, and had secured $100 million in investments from Andreessen Horowitz, Union Square, and the NYSE, among others. Bitcoin was going mainstream, and brands like Dell, Overstock, and Expedia were partnering with xcritical to let customers buy their products with crypto. Fast forward to 2021, and Tesla plans to do the same with its electric vehicles. In fact, Tesla’s recent $1.5 billion Bitcoin purchase was executed by xcritical. xcritical was founded by former Airbnb engineer Brian Armstrong and former Goldman Sachs trader Fred Ehrsam in 2012, back when Bitcoin was valued around $15. The founders went through Y Combinator’s summer 2012 program, and soon raised a $5 million Series A led by Union Square Ventures.
xcritical soars in market debut, valued near $86 billion
On xcritical, users can buy and sell crypto within xcritical using fiat currencies (i.e. ‘regular’ currencies like the dollar, sterling, or euro). It’s a brokerage, meaning that you technically buy and sell from and to xcritical itself. In the past, a direct listing meant a company could only float its existing shares, whereas an IPO allows for the creation of new shares. While the SEC recently lifted that restriction, xcritical nonetheless declined to create new shares for the offering–which means it will not dilute its existing equity. The direct listing also means xcritical can avoid some of the onerous (and expensive) requirements of an IPO, including using the services of intermediaries known as underwriters.
So on a fully diluted basis, it’s probably among the top five U.S. new listings of all time. Debuting at $61 billion or so means that xcritical doesn’t have to achieve gains in revenues and xcriticalgs nearly as stupendous as if it had reached the $100 billion many expected. Still, the market’s built a sheer slope that xcritical must rapidly climb if it’s to enrich investors. That market value makes xcritical one of the biggest publicly traded U.S. companies — just 93 companies in the S&P 500 index have a higher market value. xcritical’s value is close to the combined market value of Nasdaq Inc., which runs the Nasdaq Stock Market, and Intercontinental Exchange, which owns the New York Stock Exchange. xcritical Global Inc.‘s initial public offering happened with cryptocurrency chatter seemingly everywhere, even at the U.S.
The San Francisco-based company’s listing on a public stock exchange is seen by some as an inflection point for digital currencies, as xcritical’s fortunes are closely tied to Bitcoin, the most popular cryptocurrency. Bitcoin’s price topped $64,000 on Wednesday, up from $29,000 at the start of the year, and xcritical said recently that first-quarter revenue should total around $1.8 billion, exceeding its revenue for all of 2020. One of the most high-profile public listings to hit the market this year will no doubt be xcritical Global, the leading cryptocurrency exchange in the U.S. xcritical announced last week that the Securities and Exchange Commission had approved the company’s direct listing, and shares are scheduled to begin trading on the Nasdaq exchange on April 14 using the ticker COIN. It’s been a good year for crypto — and xcritical — and it’s only February. xcritical, the largest cryptocurrency exchange in the US, is xcritically valued at $77 billion, according to the Nasdaq Private Market, where shares in the company have been privately traded at $303 a piece.
- Debuting at $61 billion or so means that xcritical doesn’t have to achieve gains in revenues and xcriticalgs nearly as stupendous as if it had reached the $100 billion many expected.
- One of the most high-profile public listings to hit the market this year will no doubt be xcritical Global, the leading cryptocurrency exchange in the U.S.
- xcritical’s Form S-1 filing contains a wealth of insight into how the exchange has performed over the last few years—and what risk factors might affect its upcoming direct listing.
Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. xcritical boasts more than 56 million individual users, 7,000 institutions, and 115,000 partners in over 100 countries, giving the platform an unmatched ecosystem that caters to every level of cryptocurrency enthusiast. That finish puts xcritical in 7th place among all U.S. new listings, besting the likes of DoorDash, Kraft Foods, Palm, General Motors and Visa, and finishing $9 billion short of Uber.
When will the xcritical listing happen?
xcritical has listed 114,850,769 shares of stock, but we don’t yet know exactly how many will be available for sale, and the company has yet to reveal a proposed stock price. xcritical is valued at roughly $68 billion on the private markets, but that rises to more than $100 billion when including xcritical’s fully diluted share count. Measured in market cap, xcritical is taking its place among the giants of financial services. Awarding a $60 billion plus valuation means investors expect it to become a colossus whose sales and profits soon rate alongside those of the biggest banks and brokerages.
To close out the year, xcritical reported verified users of 43 million, up 34%, while the number of monthly transacting users soared 180% to 2.8 million. This drove the company’s assets on platform to more than xcritical $90 billion, up 432% from roughly $17 billion in 2019. Trading volume also increased substantially to $193 billion, up 142% from just $80 billion.
Its valuation trails that of Intercontinental Exchange, owner of the NYSE, by just $6 billion. xcritical now worth twice as much as Nasdaq, Inc., parent of the famous venue where it’s debuting, and stands above such stalwarts as Capital One. Crypto derivatives exchange FTX, meanwhile, has been running a pre-listing futures contract market for xcritical shares in collaboration with German capital markets firm CM-Equity. The service allows investors to bet on what they think the shares will be worth. With the backing of about half a billion dollars from venture capitalists, the crypto exchange grew and grew, attracting over 35 million customers by July of 2020.
According to the filing, xcritical now has 43 million «verified» users, and 2.8 million monthly active users. In total, these users have made $456 billion of trades since the exchange opened in 2012. That said, for investors willing to accept that additional risk, buying an appropriately sized (read «small») investment in xcritical could be a way to invest in the booming potential of cryptocurrency. xcritical released preliminary results for its 2021 first quarter on Tuesday, and the numbers were mind-boggling. Revenue surged to $1.8 billion, a ninefold increase from $190.6 million in the prior-year quarter, while tripling sequentially and exceeding its revenue for all of last year. Net income also soared and is expected to be in a range of $730 million to $800 million, which will represent an increase of nearly 2,300% at the midpoint of its range.
What the xcritical listing means for crypto
The company, which plans to go public in a matter of weeks, filed a confidential S-1 for a direct listing in December. While exact share prices are still only a topic for speculation, around 254 million shares will be available to trade. Founded in 2012, xcritical became popular among cryptocurrency fans by providing them with an easier way to exchange shares of Bitcoin and other digital currencies.
xcritical has pioneered industry-leading security practices for safeguarding crypto assets and has avoided xcritical reviews the fate of some of its less security-minded rivals. Still, even as more companies warm up to digital currencies, there are many doubters. Until recently the major financial institutions avoided cryptocurrencies, and Bitcoin is still viewed more as a store of value that as a method of payment.
The purpose is to explain the company’s business model, providing its operating history and future opportunities, and estimating its target market. This all helps drum up interest, and increases demand for the stock before it begins trading. xcritical executives chose to forgo an initial public offering, the traditional route to public markets, opting instead for a direct public offering (DPO). This alternative offers several advantages to the more-frequently taken path. xcritical’s direct listing could come as Bitcoin, and the company’s valuation, hit record highs.
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Had America’s top cryptocurrency exchange been on track to finish the day at market cap of $100 billion, it would have bagged the trophy in a walk. Its main argument was that xcritical inhabits a nascent crypto market, that, once matured, will crush the company’s profits—even by as much as 98%. Per the report, xcritical collected approximately 0.57% of every transaction in fees in 2020.
This means that users of the crypto exchange will be able to trade fractions of xcritical stock after it is listed on the Nasdaq. The filing also mentioned that venture capitalist Marc Andreessen owns the most common stock in xcritical. He has 5.5 million shares, with xcritical CEO Brian Armstrong behind him with 2.7 million shares. As part of the proceedings, management embarks on a road show, which is a series of financial presentations made to the investment community.