The surge of crypto companies pursuing U.S. initial public offerings (IPOs) has sparked intense debate across the Web3 and traditional finance worlds. With approximately 13 crypto firms currently navigating the Securities and Exchange Commission (SEC) approval process—ranging from exchanges and mining operations to DeFi protocols—the trend signals a pivotal shift in how blockchain-native businesses approach capital markets.
But why are so many crypto enterprises setting their sights on American exchanges? Is a U.S. IPO the golden ticket to legitimacy and growth, or does it come with hidden risks that challenge the core ethos of decentralization?
Why Are Crypto Companies Rushing to Go Public in the U.S.?
For many crypto-native firms, listing on U.S. exchanges like Nasdaq or NYSE offers compelling advantages:
- Market depth and liquidity: U.S. capital markets provide unmatched trading volume and investor access.
- Valuation premium: Publicly traded crypto firms often receive higher valuations compared to private market peers.
- Global brand credibility: A U.S. listing enhances trust among institutional investors and retail users alike.
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Circle, the issuer of USDC, exemplifies this trend. Despite USDC’s circulating supply valuing around $30 billion, Circle’s market cap soared to $40–50 billion post-listing—demonstrating investor appetite for regulated, transparent blockchain infrastructure.
Joy Chen, Investment Manager at Waterdrip Capital, notes: “Even profitable crypto projects with stable cash flows often fail to achieve fair market valuation on digital asset exchanges. In contrast, mature markets like the U.S. and Hong Kong better reflect fundamental value.”
However, not all projects are equally positioned. As XinGPT from Distill AI observes, only businesses with clear revenue models—such as exchanges and stablecoin issuers—are currently viable for IPOs. Most native DeFi protocols still rely heavily on tokenomics rather than sustainable income streams.
Navigating Compliance: The Three Major Hurdles
Going public in the U.S. isn’t just about financial performance—it’s a regulatory marathon. Crypto companies must overcome three critical challenges:
1. Securities Classification
The SEC applies the Howey Test to determine whether a digital asset qualifies as a security. For companies that have already issued tokens, this creates significant uncertainty. As Tim, CEO of BM Capital, explains: “A project’s whitepaper can become legal evidence. Teams must carefully redefine token utility to avoid classification as an investment contract.”
2. Financial Transparency
Traditional accounting standards require audited financial statements—a hurdle for blockchain firms where revenue may come from protocol fees, staking rewards, or token burns. Unlike a tokenomics paper, an IPO demands GAAP-compliant disclosures, robust governance, and anti-money laundering (AML) frameworks.
3. Business Model Alignment
Firms must decouple their token economy from core operations. One common strategy is using a Special Purpose Vehicle (SPV) or dual-layer structure to present the business as a technology services provider rather than a token-driven entity.
Jade, PR Manager at HashKey Group, highlights Hong Kong’s hybrid model—where crypto assets are integrated into traditional equity structures through capital increases—as a potential blueprint for compliance.
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Sean Tao of EVG Partners adds: “We see most pre-IPO crypto firms opting for private placements to accredited investors—a path similar to Sun Yuchen’s acquisition of SRM. Direct IPOs remain rare due to regulatory complexity.”
Does Mass IPO Adoption Accelerate Financial Integration—or Betray Decentralization?
This question cuts to the heart of Web3’s identity crisis.
On one hand, IPOs bring legitimacy. JT Song from 0G argues that listing helps educate mainstream investors about network effects, innovation pipelines, and real-world use cases—accelerating adoption beyond niche communities.
Moreover, Bitcoin’s increasing correlation with Nasdaq stocks suggests a broader “securitization” of digital assets—a trend that could normalize crypto within pension funds and ETFs.
Yet critics warn of centralization risks. As Tim cautions: “Venture capitalists, auditors, and investment banks could become the new gatekeepers of Web3, diluting user ownership and shifting governance power toward institutions.”
The solution may lie in balance. Jade believes compliance and decentralization aren’t mutually exclusive: “Regulatory clarity allows innovation to flourish safely. What we’re seeing now is not a betrayal, but maturation.”
Joy Chen emphasizes differentiation: “Public markets favor stable cash flows and clear operations—traits most native DeFi projects lack. For them, staying within the crypto ecosystem might be more strategic.”
What Opportunities and Risks Should Native Users Watch For?
For early adopters and retail investors, the IPO wave presents both promise and peril.
Opportunities:
- Exposure to regulated crypto infrastructure: Stocks like Coinbase or Circle offer indirect exposure without holding volatile tokens.
- Innovation discovery: Public disclosures reveal technical roadmaps, user metrics, and strategic partnerships.
- Market education: As traditional investors analyze crypto-linked stocks, awareness spreads beyond speculative circles.
Risks:
- Overvaluation: Circle’s market cap exceeding USDC’s supply highlights potential bubbles.
- Business model fragility: Some listed firms depend on Bitcoin appreciation (e.g., MicroStrategy), making them vulnerable in bear markets.
- Governance misalignment: Token holders may lose influence when corporate shares dominate decision-making.
Kevin Law from OSL warns: “Even after a successful IPO, long-term performance hinges on fundamentals—not hype. Investors should assess real revenue, cost structures, and regulatory resilience.”
Frequently Asked Questions (FAQ)
Q: Can a DeFi protocol go public in the U.S.?
A: Currently, it’s extremely difficult. Most DeFi projects lack centralized revenue streams or auditable financials. To qualify, they’d need to restructure as legal entities with clear income sources and compliance frameworks.
Q: Does a U.S. IPO mean a crypto company is fully compliant?
A: Not necessarily. While IPOs require SEC approval, ongoing compliance depends on continued adherence to disclosure rules, tax laws, and evolving regulations around digital assets.
Q: Are there alternatives to U.S. listings for crypto firms?
A: Yes. Hong Kong has emerged as a favorable jurisdiction with clearer crypto regulations. Other options include Canada and EU markets, though none match the liquidity of U.S. exchanges.
Q: Will tokenized stocks or asset-backed tokens replace traditional IPOs?
A: Not yet. While tokenization holds long-term potential, current infrastructure lacks the legal recognition and scalability needed for mass adoption.
Q: How do I evaluate a crypto company before it goes public?
A: Focus on revenue sustainability, regulatory posture, audit readiness, and whether the team has separated token utility from fundraising mechanics.
Q: Is investing in a crypto IPO safer than buying tokens?
A: Generally yes—due to higher transparency and oversight—but it’s not risk-free. Market sentiment, macroeconomic factors, and execution risks still apply.
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The rush toward U.S. IPOs reflects a broader evolution: Web3 is no longer just a technological experiment—it’s becoming part of the global financial fabric. While challenges remain around compliance and decentralization, the integration of crypto into regulated capital markets could ultimately drive wider adoption, greater stability, and deeper innovation.
For native users, the key is discernment—separating genuine value creators from speculative ventures dressed in regulatory armor. As the line between TGEs (Token Generation Events) and IPOs blurs, those who understand both worlds will be best positioned to thrive.