Recurring market commentary on what's happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Things that make you go hmmm...
In this case, the valuation of the newly announced IPO of "Bullish": 9 billion USD.
Let's quickly break it down: it is pretty straightforward. There are only two components involved in the valuation of the company:
- The crypto holdings (roughly 6 billion USD)
- The value you assign to the newly launched exchange Bullish (valued at 3 billion USD, which then adds up to the 9 billion USD valuation)
So, in order to decide whether or not Bullish should be valued at 3 billion USD, we need to have a quick look at the business model. It is also pretty straightforward.
Bullish is a centralised exchange with one difference that makes it stand out. It will provide liquidity via an AMM, equipped with their own capital.
- Former NYSE president to take crypto exchange Bullish public via SPAC
- Bullish Announces Intent to Go Public on New York Stock Exchange
For all of you who have some experience with the IL (impermanent loss) risk of an AMM (like me...), you might be seeing some issues with this 3 billion USD valuation.
The trading desk is ready as always for a chat - about this and other topics. Simply reach out.
Have a good trading week!
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