EToro’s Bold Move: Is This the Next Big Crypto IPO?

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What to know:

  • Trading platform eToro filed to sell shares to the public on the New York Stock Exchange, and is seeking a $5 billion valuation.
  • If successful, the company will be one of the few publicly listed companies to offer crypto trading.
  • An attempt to go public in 2021 through a $10.4 billion SPAC deal, failed because of unfavorable market conditions.

According to a report from the Financial Times, eToro – a popular stocks and cryptocurrency trading platform geared towards individual investors – plans to offer shares for sale on the New York Stock Exchange, as indicated by a secret document filed with the United States Securities and Exchange Commission.

According to the Financial Times, the potential sale of the company, possibly happening in the second quarter, is estimated to be worth over $5 billion. Goldman Sachs, Jefferies, and UBS are serving as advisors for this transaction.

If it proves successful, eToro could become one of only a handful of publicly traded American companies that facilitate cryptocurrency trading, alongside giants like Coinbase ($69 billion in market capitalization) and Robinhood ($40 billion). However, it’s important to note that the newcomer would likely be significantly smaller than either of these established players.

If we were to rephrase the given text in a more natural and easy-to-understand manner, it would be: “In comparison to its aim in 2021 to go public through a $10.4 billion deal with a Special Purpose Acquisition Company (SPAC), the valuation is now expected to be significantly lower – less than half the original figure. This plan was eventually scrapped towards the end of 2022 due to unfavorable market conditions.

2023 saw eToro receive a $250 million investment at a valuation of $3.5 billion from investors like SoftBank, despite the company’s valuation experiencing a dip. However, the valuation has since increased due to the surge in both equity and cryptocurrency markets, and after eToro agreed to pay $1.5 million to settle charges by the SEC for operating without registration as a broker and clearing agency, as well as facilitating trading of certain crypto assets as securities.

It’s not clear what exactly eToro’s cryptocurrency trading volume is, but according to Finance Magnates, it increased by over 500% from the beginning of the year to November.

As a researcher, I’m privy to the fact that this particular company, established in Israel back in 2007, has under its management an impressive sum of approximately $11.3 billion. This wealth is entrusted by more than 3 million clients. The assets in question encompass a wide array of investments, not just cryptocurrencies, but also stocks and exchange-traded funds as well.

Previously, due to a deal reached with the SEC, it decided to discontinue trading various cryptocurrencies within the U.S., thereby restricting American users to only trade bitcoin (BTC), bitcoin cash (BCH), and ether (ETH) on its platform.

The company did not respond to a request for comment.

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2025-01-16 19:27