Jesse Powell’s crypto trade Kraken is in search of $500 million at a $15 billion valuation, a 36% enhance from its $11 billion valuation in 2022.
That worth anchors a comp for the world’s largest crypto trade, Changpeng Zhao’s Binance, at greater than $100 billion.
Utilizing a conventional price-to-sales (P/S) ratio, Kraken is in search of a 10x a number of of its $1.5 billion in 2024 income. Powell desires that valuation forward of his preliminary public providing (IPO) in 2026.
Sadly, Kraken has been in search of a $15 billion valuation for a few years. As early as winter 2021, Powell was fundraising within the $10-20 billion vary.
Nonetheless, Kraken’s newest fundraise creates a brand new technique for peer evaluation of the world’s largest crypto trade.
Domestically, Kraken is the second-largest US crypto trade after Coinbase, which is publicly valued at $97 billion. Globally, Kraken ranks eighth by buying and selling quantity per CoinGecko and 14th per Binance’s CoinMarketCap.
For years, crypto exchanges have remained non-public, obscured from public market valuation as they quietly function worthwhile enterprises. Kraken’s fundraising and Powell’s potential IPO create a brand new technique for peer evaluation of Binance.
At $15 billion, Kraken’s company valuation represents a 10x a number of of its $1.5 billion income in 2024. Kraken reported $665 billion in buying and selling quantity for 2024.
Binance, compared, generated $16.8 billion in 2024 income — 11 occasions better than Kraken’s $1.5 billion. Curiously, Bloomberg contests Binance’s self-reported determine, estimating company revenues at simply $9.8 billion over the previous 12 months.
Binance processed $7.4 trillion in spot buying and selling quantity alone in 2024 — not less than 11 occasions better than Kraken’s most $665 billion.
Importantly, Kraken should honestly report buying and selling quantity and revenues underneath US monetary disclosure laws if it recordsdata for an IPO.
Binance, in distinction, has by no means indicated plans to file IPO documentation, isn’t headquartered inside the US, and doesn’t have an obligation to observe US accounting requirements.
The combination of Kraken’s buying and selling quantity denominated in USD dwarfs the share of USD buying and selling quantity at Binance. For a lot of causes, it’s far simpler and considerably much less dependable for valuation functions to generate and report stablecoin- and crypto-denominated transactions.
Nonetheless, Binance is definitely far bigger than Kraken.
By buyer base, Binance serves over 275 million registered prospects — 18 occasions greater than Kraken’s 15 million.
Lastly, Binance has an estimated 39% market share amongst all crypto exchanges per CoinGecko — 19 occasions bigger than Kraken’s 2%.
Placing the maths collectively
Summarizing the above metrics, Binance’s company revenues and spot buying and selling volumes are each 11 occasions bigger than Kraken. Each Binance’s buyer base and market share is about 18 occasions bigger.
Placing these numbers collectively, it’s secure to say that Binance might be value greater than $100 billion. Choosing both an 11 or 18 multiplier on Kraken’s meant $15 billion valuation simply surpasses 10 greenback figures.
On the extra conservative facet, Bloomberg estimates Binance’s valuation at about $58 billion. Its workers methodology features a discretionary, 50% low cost on its in any other case comparable sales- or earnings-derived valuations “due to institutional, regulatory and related risks.”
It is a significantly extraordinary alternative provided that Coinbase, which admits it’s smaller than Binance, is publicly traded on US markets at a $97 billion valuation.
In different phrases, it’s extremely seemingly that Kraken’s newest valuation imputes a valuation of greater than $100 billion for Binance.
