Surge in Crypto Venture Capital Funding Amid Regulatory Clarity
Growing acceptance of cryptocurrencies and a positive regulatory environment have sparked renewed interest among venture capitalists seeking liquidity opportunities. Recent data from DefiLlama indicates that crypto startups successfully raised over $4.90 billion in the first quarter of this year, a notable increase from $3.62 billion in the previous quarter of 2024. While venture capital funding remains significantly below the peaks seen in 2021-22, this recent growth follows a strong performance in 2024 for crypto-focused VC firms. In recent weeks, several blockchain payment and stablecoin companies have secured substantial funding.
With the U.S. Securities and Exchange Commission (SEC) poised to clarify regulations surrounding digital assets, venture capital firms are actively pursuing liquidity events across the cryptocurrency landscape. This year, they might have at least five initial public offerings (IPOs) to consider, with companies such as Animoca Brands, Telegram, Ionic Digital, Kraken, and Circle under the spotlight. One company is already in the process while the others could potentially go public soon.
The Impact of SEC Leadership on Crypto Funding
If these IPOs materialize, it would signify a significant rebound from the funding challenges created by former SEC Chair Gary Gensler, known for his skeptical stance on cryptocurrencies. During his tenure, Gensler initiated numerous enforcement actions against major industry players, including Binance and Coinbase. As Bitcoin gears up for another upward movement and market confidence returns, venture capitalists, facing increasing pressure to deliver returns to their limited partners, may find this an opportune moment.
Key Players in the Upcoming IPO Landscape
1. **Circle**
On April 1, Circle, the stablecoin issuer backed by Coinbase, confirmed years of speculation by filing for an initial public offering with the SEC. This filing comes after two years of growing anticipation and sets the stage for the firm’s long-anticipated entry into the stock market. Targeting a valuation of $5 billion, Circle, which operates the USDC stablecoin, has appointed JPMorgan Chase and CitiGroup as its lead underwriters. The company plans to list on the New York Stock Exchange under the ticker symbol CRCL. Circle has positioned USDC as a compliant and transparent digital currency to compete with the dominant Tether’s USDT. In July 2024, it became the first stablecoin issuer to comply with the European Union’s Markets in Crypto-Assets (MiCA) regulations.
2. **Kraken**
In June 2024, it was reported that Kraken, a prominent cryptocurrency exchange, was seeking to raise over $100 million in pre-IPO funding, even as it faced legal challenges from regulators who alleged the company had “unlawfully” facilitated the trading of crypto asset securities and mixed customer funds. As of late January 2025, the legal dispute with the SEC was ongoing. A significant setback occurred on January 24, 2025, when a federal judge in California dismissed Kraken’s defense that transactions on its platform were not subject to SEC oversight. An investor note from Bitwise revealed that Kraken had been contemplating an IPO “since at least 2021,” with market conditions causing delays, but plans could resume in 2025.
3. **Telegram**
The messaging platform Telegram has gained favor among crypto enthusiasts by incorporating blockchain services and crypto wallets. Its connection to the crypto sector began in 2019 with the introduction of the Telegram Open Network (TON) blockchain. However, development on TON halted following an SEC lawsuit against the company for issuing tokens to investors. Currently, the TON blockchain is being developed in an open-source manner by the community, and Telegram remains committed to the project. In February 2024, founder Pavel Durov announced the company would utilize TON exclusively for its revenue-sharing program. Durov also mentioned to the Financial Times that Telegram is considering an IPO as a way to democratize access to its value.
4. **Animoca Brands**
Animoca Brands, a Hong Kong-based web3 investment firm and gaming developer, aims to go public in 2025. Reports suggest the company is exploring “crypto-friendly” markets, including Hong Kong and the Middle East, for a potential IPO. Previously listed on the Australian Securities Exchange (ASX) from 2015 to 2020, Animoca was delisted in March 2020 due to non-compliance with listing regulations. Its business model encompasses digital asset advisory services, web3 applications, and investment management. Animoca is also developing blockchain applications for institutions like NEOM and is involved in creating stablecoins and decentralized physical infrastructure networks (DePIN).
5. **Ionic Digital**
Ionic Digital emerged in January 2024 from the reorganization of the failed crypto lender Celsius Network, acquiring Celsius’ Bitcoin mining assets. As part of its bankruptcy plan, Ionic Digital’s stock was issued to Celsius’ creditors, and it is required to go public to offer liquidity to its shareholders. The company intends to list on the Nasdaq Stock Exchange. In a letter to shareholders on January 14, 2025, interim CEO Anthony McKiernan reaffirmed the commitment to a public listing, with the financial audit expected to conclude by the second quarter of 2025.
Predictions for Crypto IPOs and M&A Activity in 2025
Analysts from Bitwise predict that 2025 is poised to be “the year of the crypto IPO,” driven by strong investor interest and increased adoption from both retail and institutional investors, alongside a favorable regulatory climate. Additionally, mergers and acquisitions (M&A) activity within the crypto sector is on the rise. A report from Architect Partners indicates that over 60 M&A transactions valued at more than $2.2 billion were completed in the first quarter of 2025, setting a new record. This includes Kraken’s acquisition of the DeFi futures trading platform NinjaTrader for $1.5 billion, which was highlighted as the “biggest crypto deal yet.” Ripple also announced a recent acquisition of prime brokerage Hidden Road for $1.25 billion. Several other firms, such as Figure, Anchorage Digital, and Chainalysis, are also anticipated to pursue public listings in 2025.
