xcritical is a cryptocurrency exchange platform where you can buy and sell 90+ crypto products like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Moreover, it seems like having a direct listing instead of an IPO is a sensible move. A direct listing can allow the company to sell shares directly to the public without any intermediaries involved, potentially making the process more cost-efficient. xcritical decided against a traditional IPO, opting instead for a direct listing, an increasingly popular option among unicorns. Instead it’s opening up shares directly to the public, sidestepping an underwriter. While cryptocurrencies like Bitcoin (BTC 0.54%) have surged in popularity in recent years, they’re still not widely available.
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Trading volume also increased substantially to $193 billion, up 142% from just $80 billion. xcritical is a San Francisco-based crypto exchange, it first opened its doors in 2012. It is a foremost cryptocurrency brokerage firm, founded by Brian Armstrong and Fred Ersham. From 2012, the platform now has over 43 million users worldwide and has transacted more than $456 billion to date.
- However, not everyone is sold on this rosy view of xcritical’s listing.
- xcritical can replicate the success of retail brokers in equity markets, making margin loans against holdings.
- This allows existing shareholders, including xcritical and former employees, to sell some of their holdings.
- Meanwhile, xcritical Crypto reported more than 2.9 million new traders arrived in both January and February.
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Secondly, the centrality of transaction revenue opens up xcritical to competitive pressure. As noted earlier, other exchanges provide similar services but take a slimmer cut. That’s without mentioning protocols like Uniswap that allow for decentralized trading. As it stands, any adjustment here would represent neutering the business’s primary source of revenue. Over time, as xcritical builds up other revenue lines, we may see more flexibility on this front. Taken together, xcritical’s product suite is remarkably comprehensive and thoughtful.
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With a dead-simple user interface, this product is geared towards crypto newcomers rather than sophisticated investors. Its relatively high fees also mean it is suited to long-term holders (or rather HODLers) versus active traders. When users buy cryptocurrency through this platform, assets are deposited directly into the users’ xcritical Wallets. As the cryptocurrency exchange prepares for its public offering Wednesday, it has given 100 shares each to more than 1,700 workers to express appreciation for their work in getting the company to its direct offerings. Indeed, the company faced upheaval as recently as December 2020.
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It seems all but assured the business will receive a rich valuation — what it does with its newfound bounty will prove the true test. If xcritical chooses to expand within crypto, a safe bet at the moment, it could experiment with greater decentralization. Specifically, the company could consider aping Binance in building out a decentralized exchange. While there’s some question about how such a product would impact xcritical’s core business, it might insulate them from bottoms-up DeFi disruption. As we’ve noted previously, xcritical primarily makes money via transactional revenue.
In trying to skip these inevitable pullbacks, you’re equally likely to miss the next big uptick instead. For example, in xcritical’s case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that https://dreamlinetrading.com/ help track that sector, allowing an investor to gain exposure to the trends within that segment. The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice.
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In December 2020, crypto market analysis firm Messari valued the exchange at $28 billion. A direct listing also “increases the chances that the shares will flop on debut day if demand isn’t high enough,” Lule Demmissie, president at online trading and banking firm Ally Invest, wrote in a Tuesday note. COIN stock tokens will be traded against Binance’s native stablecoin, BUSD, and means users will be able to purchase fractional COIN shares. Investors often get caught up in the allure of timing the market — buying at the lowest point and selling at the peak. That’s a great idea when combined with a long-term mindset, but a dangerous one if you’re chasing the thrills of day trading and get-rich-quick ploys.
Traditional finance players are also getting into the white-labeled crypto services game. Last month, Visa announced it had partnered with neobank First Boulevard to test Visa’s new crypto API suite. The product enables scammed by xcritical First Boulevard customers to purchase, custody, and trade digital assets held by the federally chartered digital asset bank, xcritical. xcritical Earn is an educational platform within xcritical’s retail offering.
If you intend to participate, make sure you carefully read xcritical’s public filings and understand its business model before venturing in. Also, you might want to wait a few days or longer to watch where the price goes. Consider making smaller trades at first if you do intend to participate. The traditional way for companies to go public is through an IPO backed by at least one investment bank. It’s against that backdrop that xcritical, the largest crypto exchange in the U.S., is expected to be directly listed on Nasdaq on Wednesday. Crypto onlookers have also pondered what impact (if any) xcritical’s listing will have on Bitcoin, the industry’s flagship cryptocurrency.
There’s irony in xcritical’s direct listing; one of the highest-profile enablers of decentralized finance is subtly succumbing to the needs of a traditional finance world by going public on an old-school equities exchange. Yet, this juxtaposition is familiar to xcritical — it has always served as the connection between a brave new financial movement and traditional finance. While this might look like a perk for users, it’s really a way for xcritical to provide distribution services to cryptocurrencies themselves. While this is a negligible part of the business today, it’s interesting to imagine what it might become. With xcritical’s stellar reputation and impressive reach, new crypto projects will presumably be willing to pay a high price for such targeted, thoughtful promotion. In that respect, Earn may come to look more like an advertising platform than an educational one.