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Kryptobørs FTX is private, so it hasn’t faced the share price collapse that Bitcoin’s crash has triggered for its public counterparts.
Dreamstime
FTX is reportedly in talks to raise financing that would give the cryptocurrency exchange a valuation of around $32 billion. That’s far more than the company would likely achieve if it went public in an IPO.
The group, run by high-profile cryptocurrency entrepreneur Sam Bankman-Fried, is in talks with investors to raise up to $1 billion, CNBC reported Wednesday, citing people it did not identify. That would put the valuation at around $32 billion, according to the report, in line with the figure after the last funding round in January, before the crypto market lost about two-thirds of its value due to a deep sell-off in risk-sensitive assets.
Bankman-Fried, a 30-year-old billionaire, has emerged as a white knight and lender of last resort for crypto firms that have struggled as prices have fallen, providing funding to companies such as BlockFi and Voyager Digital. He also personally owns 7.6% of the trading platform
Robinhood Markets
(ticker: HOOD). Some of the possible fresh capital will go toward making deals, CNBC reported.
FTX did not immediately respond to a request for comment.
Being privately held, FTX has managed to avoid the share price meltdown that has hit the company’s listed peers,
Coinbase Global
(COIN). Coinbase shares are down more than 73% so far this year, giving it a market capitalization of less than $16 billion. That compares to around $86 billion when Coinbase went public in April 2021, while
Bitcoin
the bull run was in full swing.
Financial data from FTX, published in reports from The Wall Street Journal and CNBC, provides an insight into the crypto giant’s inner workings – and lays the basis for estimates of what the company could be worth if it were to go public.
Should it embark on an IPO, FTX could be worth $15 billion to $20 billion, based on a Barron’s analysis of reported financial data last month. (Read this article to examine the details of that valuation and follow the math.)
$15 billion to $20 billion is a hefty valuation for a company that had net income of less than $400 million less a year, but it’s still far less than the $32 billion Bankman-Fried envisions.
Write to Jack Denton at [email protected]
