Ethereum transaction fees are running sky-high. That’s infuriating users and boosting rivals like solana and avalanche.

Crypto ethereum ether
The ethereum network is at the heart of the modern crypto ecosystem.

  • Ethereum transaction fees are running red hot as people pile onto the network for NFTs and DeFi.
  • Yet the high costs are infuriating users and sending many towards other blockchains such as solana.
  • Developers are scrambling to fix the problem, which could threaten ethereum’s top-dog status.

Transaction fees on the ethereum blockchain are running red hot as NFT-mania clogs up the network.

It’s a problem that’s infuriating people and sending many looking elsewhere, to cheaper blockchains such as solana and avalanche.

Some even think it could be an existential threat to a cryptocurrency network that bills itself as the future of finance.

The ethereum network runs ether, which has a total market value of more than $500 billion, making it the world’s second-biggest cryptocurrency after bitcoin.

But the network is also at the centre of the modern crypto ecosystem. It’s the foundation on which non-fungible tokens (types of crypto collectibles) and decentralized finance are built. Both NFTs and DeFi are now huge industries.

Ethereum is running on surge pricing

On ethereum, people pay a “base fee” to have their transactions verified by other users known as “miners.”

Yet those fees have rocketed as interest in NFTs has soared, and more people try their hand at DeFi.

Imagine ethereum as a bit like a ride-hailing app that is struggling to add new drivers, in a city that’s just seen a huge influx of people. Now, for each ride (or transaction), people have to pay a huge surge price to get drivers to pick them up.

The average transaction or “gas” fee on the ethereum network rose to as high as $63 in November. That was its second-highest level ever, behind May’s record high of $70, according to crypto exchange Kraken’s analysts.

Read more: A currency strategist at UBS shares the 3 trends he believes will shape the crypto market in the next 12 months

People are regularly paying more than $100 just to deposit, say, $50 worth of cryptocurrency on DeFi platforms – and that’s making many extremely angry.

“Gas fees are insane,” said one user on the ethereum Reddit page. Another said: “If the ethereum network can’t fix its gas fees, it won’t be used by the average consumer.”

Some are looking to solana

Not all crypto fans are upset. Networks such as solana, avalanche, and cardano are positioning themselves to profit.

Solana’s transaction fees are minuscule, just a fraction of a penny. The network is also much faster, handling many thousands of transactions per second, compared with double-digit figures for ethereum.

Solana’s native token sol has risen more than 400% over the past 180 days, according to Coingecko. Avalanche is up more than 500% over the same period, while ethereum has gained around 80%.

“Some of those headwinds for ethereum I think have caused people to ask themselves, ‘What else do I want to own at this point?'” Pete Humiston, head of research at Kraken, told Insider.

Developers are working on it

So why can’t ethereum simply expand the network?

Ben Edgington, a developer at ethereum-focused company ConsenSys, said it’s a philosophical point.

Increasing the capacity of a decentralized crypto network would mean forcing users to deal with ever-increasing data and to upgrade their hardware, he told Insider.

“If we crank up transaction throughput, that will exclude those with more modest resources from participating,” Edgington said. It would then no longer be very decentralized.

Developers are scrambling to work out other solutions, such as expanding a second ethereum layer. That would effectively enable many activities to happen away from the core network, which would remain accessible.

It’s far too soon to say high gas fees are a crisis for ethereum, according to Jack O’Holleran, CEO at ethereum development company Skale Labs. In fact, he said, they’re a symptom of the network’s huge success.

“There’s so much momentum from a developer perspective around ethereum,” he told Insider. “The best quality teams and projects and platforms are all building on ethereum. It’s the system that connects into everything.”

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Hype around the metaverse drove NFT tokens up 42% in November, making it the best performing cryptocurrency sector

A rendering of land in The Sandbox virtual metaverse
Sand, the cryptocurrency of The Sandbox metaverse, rose 330% in November.

  • NFT-linked cryptocurrencies stormed ahead in November, as investor interest in the metaverse surged.
  • A basket of NFT cryptos rose 42% in November, making it the best performing part of the market.
  • Sand, the native token of The Sandbox, shot up 330% in November, according to Kraken data seen by Insider.

NFT-linked cryptocurrencies were by far the best performing group of digital assets in November, according to new data from the Kraken exchange, rising 42% as interest in the metaverse surged.

The metaverse is a catch-all term for virtual worlds, where users in the form of avatars can play games, work, build things, or watch live events. Metaverses that use crypto technology such as Decentraland and The Sandbox have recently boomed in popularity.

In them, users can buy and sell non-fungible tokens that represent parcels of land, clothing, or even mega-yachts. A company last week bought a parcel of land for $4.3 million in The Sandbox.

Tokens that facilitate the trading of NFTs within these virtual worlds outstripped more traditional cryptocurrencies such as bitcoin and ether, according to a market report produced by analysts at Kraken and shared with Insider.

The 12 biggest NFT-linked cryptocurrencies rose 42% in November on average, when weighted by size, taking their three-month gain to 171%, Kraken said. Bitcoin fell 7% in November while ether rose 8%, according to Kraken’s data.

“The relative outperformance can be explained, in part, by renewed demand for several NFT tokens that cater to ‘the metaverse’, [which] was one of the biggest themes of [November],” said analysts at Kraken Intelligence in the report.

Among the biggest NFT cryptocurrencies are mana, which is the native currency of the Decentraland metaverse, and sand, the native token of The Sandbox metaverse. Sand rallied 330% in November, Kraken said.

Both have been hit by the major sell-off in cryptocurrencies in recent days, however, as concerns about the Omicron coronavirus variant and Federal Reserve policy have rocked digital assets.

Yet many investors are excited about the metaverse and NFTs. Non-fungible tokens are unique digital assets, securely recorded on a blockchain, which represent ownership of items such as video clips, artworks and virtual clothing.

“I think what is super interesting for 2022 on the commercial side of crypto is NFTs,” Steen Jakobsen, chief investment officer at Saxo Bank, told Insider on Monday.

He said NFTs could well become big parts of the music and art industries, which would give crypto technology a major commercial “use case.”

Read more: 4 star stock pickers from Baillie Gifford have collectively returned 356% to investors in the last 5 years with major bets. Here’s their outlook on the metaverse, play-to-earn games — and their thesis on 8 high conviction stock ideas

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Judge orders Sidney Powell, Lin Wood, and other ‘Kraken’ lawyers to pay more than $175,000 in legal fees to Michigan officials

sidney powell
Sidney Powell in December 2020.

  • A judge ordered Sidney Powell, Lin Wood, and other lawyers to pay thousands in fees to Michigan officials.
  • The ruling comes a year after the legal team tried to overturn the 2020 election results in the state.
  • The Michigan lawsuit was one of four failed attempts brought by Powell in battleground states. 

A federal judge on Thursday ordered Sidney Powell, Lin Wood, and seven other attorneys to pay thousands of dollars in attorneys fees to Michigan officials and the city of Detroit as a result of the lawyers’ attempt to overturn the 2020 presidential election results in the state.

US District Judge Linda Parker sanctioned the legal team in August for their 2020 lawsuit in Michigan, which claimed wide-spread voter fraud in last year’s election. The judge dismissed their lawsuit last December, calling the attempt a “historic and profound abuse of the judicial process” this past summer.

The Michigan lawsuit was one of four post-election cases Powell brought in battleground states — all of which eventually failed. 

The nine attorneys became known as the “Kraken lawyers” in 2020 after Powell compared their efforts to “releasing the Kraken,” referencing the film “The Clash of the Titans.” 

Parker ruled Thursday that the nine lawyers will have to pay $21,964 to the state of Michigan on behalf of Michigan Gov. Gretchen Whitmer and Secretary of State Jocelyn Benson. Parker also ordered that another $153,285.62 go to the city of Detroit.

The lesser amount was the exact number Whitmer and Benson had requested, while the city was granted slightly less than it had asked for after Parker noted miscalculations in the city’s fee total.

The attorneys were ordered to attend at least 12 hours of continuing legal training on the topics of election law and pleading standards, and Parker also referred the lawyers to licensing disciplinary boards.

Donald Campbell, the attorney representing Powell, Wood, and other members of the co-counsel, did not immediately respond to Insider’s request for comment. 

According to Forbes, Powell and the other attorneys still have the option to appeal Parker’s ruling, which would halt the order amid ongoing litigation.

The legal team faces possible charges in Wisconsin as well, where state Gov. Tony Evers made a similar request for more than $100,000. Powell is also involved in several defamation lawsuits — including one from Dominion Voting Machines, which she baselessly accused of rigging the election — and faces possible disbarment in Texas.

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Shiba inu falls 21% after the 2nd-biggest whale wallet moves $2.3 billion in tokens

A gray line-art graphic depicting a Shiba Inu coin logo
Grey Shiba Inu

  • Shiba inu slid as much as 21% on Thursday after a crypto whale moved $2.3 billion in tokens from their wallet.
  • The wallet holder – the second-biggest shiba inu owner – moved the tokens earlier this week.
  • “If he decided to sell these bags, SHIB would plummet -99.99% to zero. Oof,” an analyst tweeted.
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Shiba inu tumbled on Thursday, as investors booked profits after a crypto whale moved $2.3 billion worth of coins out of their wallet, in a tumultuous week that also saw a major crypto exchange hold off on listing the token.

Shiba inu, which briefly overtook dogecoin to be the ninth-biggest cryptocurrency last week, fell as much as 21% to a 24-hour low of $0.00004428.

This most recent leg-down was triggered by evidence that the second-biggest holder of shiba inu had moved as many as 40 trillion tokens from their wallet – often seen as a precursor to a large sale.

The wallet had been inactive for some time, and many thought the user might have lost the key needed to access it, but this proved not to be the case.

“If he decided to sell these bags, SHIB would plummet -99.99% to zero. Oof,” Jacob Oracle, a financial analyst said on Twitter on Wednesday.

This isn’t the first time a shiba inu whale has caused big swings in the price. The token rose more than 20% to another record after a big holder purchased 276.6 billion tokens in late October.

Shiba inu’s market capitalization stands at $31 billion, ranking it 11th in terms of total market value. It’s gained almost 570% in a month, compared with a rise of 20% in bitcoin, the largest cryptocurrency by market value.

Some investors are cautious of the coin because they are not convinced it has real use cases. The exchange Kraken ruffled the feathers of the so-called SHIBArmy this week when it suggested it might list the coin only to back down for the time being.

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Kraken won’t list shiba inu after promising to offer the dogecoin spin-off on its exchange – and the SHIBarmy are not happy

Sad shiba inu
Sad shiba inu

  • Kraken said in a tweet on Tuesday it would not list shiba inu, despite having promised fans of the coin it would.
  • The crypto exchange had initially said it would list shiba inu Tuesday if its tweet amassed more than 2,000 likes.
  • The so-called SHIBarmy of fans reacted with frustration, saying Kraken had broken its promise.
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Cryptocurrency exchange Kraken has decided to not list shiba inu, despite promising fans of the dogecoin spin-off in a tweet on Tuesday that it would do so if its post gathered at least 2,000 likes.

Within minutes of posting the promise on Monday, Kraken’s tweet easily hit that target. By Tuesday, the post had surpassed the goal and garnered almost 60,000 likes. The so-called SHIBarmy of keen fans had already driven the doge-themed coin to record highs of almost $0.000090 last week, before taking a breather.

But Kraken said in a Twitter thread on Tuesday it had decided to not list the coin after all. “There’s more work for us to do as we move through our listing review process,” the crypto exchange said.

The shiba inu community wasn’t happy. Many users questioned why the exchange would make a pledge it did not intend to honor, while others threatened to delete their Kraken accounts. Yet others called on fans to have patience.

Kraken was not available for comment when contacted by Insider.

Shiba inu has rallied in price by more than 360% in the last month, compared with a roughly 11% gain for dogecoin, the original meme cryptocurrency. It was last down around 10% on the day, at around $0.00006220.

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Bitcoin is on the cusp of a bull market that could run into the end of the year, even with this week’s meltdown: Kraken

Bitcoin
Bitcoin

  • Bitcoin appears to “be back in a bull market” despite this week’s sell-off, according to a Kraken report Tuesday.
  • Futures open interest and other measures of activity have picked up but are well below the highs of April.
  • Weekly fund flows, Google searches and Reddit data suggest there’s scope for interest to pick up.
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Bitcoin has skidded to its lowest in around a month this week, after El Salvador’s adoption of the cryptocurrency as legal tender unleashed a tidal wave of forced selling, but trading exchange Kraken said there’s another bull run in the making.

In a research report on Tuesday, Kraken noted that investor interest has picked up over the summer, but is well below the peaks seen earlier this year, while interest from the retail community also has scope to improve.

Bitcoin plummeted by as much as 20% over Monday and Tuesday this week, briefly falling below $43,000 at one point for the first time in around a month, after El Salvador made the coin legal tender, prompting a “buy the rumor, sell the news” effort to take profit among traders that snowballed into mass liquidation across various exchanges.

But this does not change the optimistic outlook, according to Pete Humiston, manager at Kraken Intelligence.

“​​While these moves look dramatic, they can be a sign of a healthy market. Because many market participants use derivatives to speculate on price, market leverage can get to a point where it needs to self-correct and reset. This results in a sudden jump in market volatility, much like the one we saw yesterday,” Humiston told Insider.

Bitcoin lost roughly 50% in value over the early part of the summer, but rallied steadily throughout July and August. “Signs suggest overall market interest has yet to return to the levels seen in April/May, when BTC and altcoins were setting new all-time highs,” the report said.

Open interest for bitcoin futures rose $10 billion in August to reach $33.2 billion, but it has “not yet returned to the market in the size we saw in April,” the report said, suggesting there was room for derivatives investors to come back into the market.

The report noted that there is room for an upswing in buying from institutional investors. For example, bitcoin-backed products logged eight straight weeks of outflows from crypto funds until last week, when they saw their first inflows, according to data from CoinShares.

“Assuming the market remains in an uptrend, we could see a resurgence in institutional demand that could fuel the market to all-time highs,” the report said.

Retail investors have also shown less appetite for bitcoin lately. There has been a reduction in the numbers of Google searches and subreddit subscriptions, which has left overall interest below where it was in the second quarter, when bitcoin and ethereum’s ether hit record highs, the Kraken report said.

“All things considered, one could argue that while we’ve seen the market post generous returns, interest has yet to return to ‘mania’ like levels, and interest in the market is starting to pick up again. That said we ought to brace for a surge in demand as we head into the year-end,” the report said.

Kraken is the 5th biggest exchange by volume according to CoinGecko.

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A federal judge skewered ‘Kraken’ lawyers for making ‘fantastical’ allegations of election fraud and failing to do the most basic due diligence

Sidney Powell in front of two US flags.
The GOP lawyer Sidney Powell.

  • A federal judge criticized “Kraken” lawyers including Sidney Powell and L. Lin Wood on Monday.
  • The remarks were at a hearing about whether they should face sanctions over their election lawsuits.
  • The judge suggested the lawyers had submitted affidavits in “bad faith,” calling them “fantastical.”
  • See more stories on Insider’s business page.

A federal judge on Monday excoriated a group of Republican-aligned lawyers including Sidney Powell and L. Lin Wood over their legal efforts to overturn the 2020 election results.

US District Judge Linda Parker made the comments at a contentious hearing on Zoom whose purpose was to determine whether the lawyers should face sanctions.

Parker repeatedly criticized the attorneys as failing to do “minimal” research on the “evidence” they presented as part of their multipronged effort – which Powell called the “Kraken” – to nullify the election results in states including Michigan, Georgia, Wisconsin, and Arizona.

“The court is concerned that these affidavits were submitted in bad faith,” Parker said.

After the so-called Kraken failed, Michigan and the city of Detroit filed complaints with the bar seeking punishment for Powell, Wood, and the lawyers who had signed on to their lawsuits, including Julia Haller, Howard Kleinhendler, Gregory Rohl, Brandon Johnson, Scott Hagerstrom, and Stefanie Lambert Junttila.

Wood sought to distance himself from the Kraken at the beginning of the hearing, saying he “played absolutely no role in the drafting of the complaint” in Michigan.

“I did not review any of the documents with respect to the complaint,” Wood said, later adding, “I just had no involvement in it whatsoever.”

But David Fink, an attorney representing Detroit, contested that claim, saying that Wood had endorsed the effort on social media and that Wood’s own lawyer had said he was associated with the case.

“He’s ready to tell people when it helps him that he’s involved in this case,” Fink said. He later accused the Kraken team of “claiming things that couldn’t have happened, either by law or fact,” and of “not vetting anything that they find.”

Parker also criticized the lawyers for filing affidavits without adequately investigating their claims.

“I don’t think I’ve ever really seen an affidavit” like this, Parker said after reading through one whose author speculated at length about whether the US Postal Service had tampered with mail ballots in the 2020 election.

“This is really fantastical,” Parker said. “How can any of you, as officers of the court, present this type of an affidavit?”

Haller responded that the affiant had submitted information he believed to be true.

“You think that by the language in the affidavit, Ms. Haller, that he is stating that he actually believes his conclusions to be true?” Parker pressed.

Shortly after, Powell spoke for the first time in the hearing, saying that they had filed a “massive” federal lawsuit alleging nationwide election fraud and that the only way to test those allegations was through the “crucible” of a trial.

The judge dismissed Powell’s statement, saying that “volume” “certainly doesn’t equate with legitimacy.”

Fink piled on. The Kraken team “made these allegations based on the paranoid delusions of some witness who never even gets to the punchline,” he said. If they don’t have evidence, they can’t make “miscellaneous, defamatory, and, frankly, phony” allegations, he added.

In his closing remarks, Fink accused the plaintiffs of having “played a very strange game of passing the buck” as it related to their role in the Kraken lawsuits.

He noted that Monday’s hearing came a little over six months after the deadly Capitol insurrection on January 6, adding that it “horrified most of us, maybe not all of us, on the screen,” at which point Wood interrupted and accused Fink of defamation.

The argument grew so heated that the court reporter interjected, noted that the hearing had been going on since 8:30 a.m. ET, and asked the lawyers to stop talking over each other so that she could accurately document the proceeding.

Parker reimposed order, and Fink accused the Kraken lawyers of using their licenses to “abuse the processes” of the court in a “devastating way.”

Fink also drew a direct line between the Kraken team’s efforts and the Capitol siege.

“Because of the lies spread in this courtroom, not only did people die on January 6, but many people throughout the world … came to doubt the strength of our democratic institutions in this country,” he said, adding that the court had a responsibility to sanction the Kraken lawyers.

“Because of the way that these lawyers have dishonored our profession, because of the way that these lawyers have taken advantage of this court and this courtroom,” the Kraken team should be referred to the bar for disciplinary proceedings, he said, adding that they should also be referred to the chief judge of the Eastern District of Michigan and prohibited from ever practicing law in the district.

Powell later said that she objected to “nearly everything” Fink said and that she’d never witnessed anything like his remarks in her years of being an attorney.

Parker then thanked Powell and the other lawyers for their remarks and wrapped the hearing, saying that though it was a long proceeding, “it has been a necessary day.”

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The CEO of Kraken says the crypto exchange is considering a traditional IPO following rival Coinbase’s volatile direct listing

Jesse Powell
Jesse Powell is the chief executive and co-founder of crypto exchange Kraken.

  • Kraken CEO Jesse Powell said he is considering an IPO when his company goes public instead of a direct listing, Fortune reported.
  • Powell’s thinking was influenced by Coinbase’s volatile direct listing in April.
  • The CEO ruled out going public via SPAC, saying his company is “too big” for it already.
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Kraken founder and CEO Jesse Powell said he is considering a traditional initial public offering to take the cryptocurrency exchange public instead of a direct listing following Coinbase’s volatile performance.

“An IPO is looking a little more attractive in light of the direct listing’s performance,” Powell told Fortune. “I would say we’re looking at it more seriously now having the benefit of seeing how the direct public offering played out for Coinbase.”

Coinbase, the largest cryptocurrency exchange in the US, went public on April 14 in what many viewed as a milestone from the digital asset ecosystem. The company was valued at $68 billion ahead of its direct listing but now hovers around a market cap of $58 billion.

Powell pinned the volatility of Coinbase’s performance to the method it used to go public, especially since existing shareholders are not prohibited from selling their shares at the debut in direct listings.

Unlike in an IPO, companies that go public via direct listing do not issue new shares.

Following a record for Kraken’s bitcoin trading volume in the first quarter of 2021, Powell had floated the idea of following Coinbase’s direct listing route.

The Kraken boss told Fortune that he is still optimistic his company can go public next year.

“Hopefully we’ll have more analyst coverage out, and there’s just more of a track record of growth for the industry that people feel like they can rely on,” he said.

While mulling over how best to take Kraken public, Powell said that a merger with a blank-check company was not an option.

“It might have been possible a few years ago, but today, I think we’re too big to consider doing a SPAC,” he said.

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Kraken crypto exchange CEO says a global regulatory crackdown could happen as adoption of digital coins grows

GettyImages 1231249876
The bitcoin price has soared in 2021

Kraken crypto exchange CEO Jesse Powell said a global regulatory crackdown on cryptocurrencies could happen, particularly as adoption becomes more widespread and governments step in to lay down rules for the market.

In an interview with CNBC on Monday, Powell said he did not think regulations will be clear-cut anytime soon and there was a risk that tough rules could come into place that might hobble use of cryptocurrencies. “I think there could be some crackdown,” he said.

Powell said he hoped the US and other large economies would not take too narrow a view on cryptocurrencies and succumb to the pressures of preserving the existing global financial system.

“Some other countries, China especially, are taking crypto very seriously and taking a very long-term view”, Powell said. China is planning to launch a digital yuan, while the Federal Reserve is still in the early stages of examining in the possibility of a digital dollar.

Many international regulators, governments and institutional investors are wary of cryptocurrencies. Their key features, such as anonymity and self-governance are a key part of the attraction for users, but there are also questions around security and the use of bitcoin to fund illegal activities, such as money laundering.

Stricter regulations might aim to combat this. The US is for example considering investor identity checks if trades break a certain threshold, but “something like that could really hurt crypto and kind of kill the original use case” Powell said.

South Korea has recently tightened regulations further to prevent illicit crypto-funded activities, while India is considering an outright ban on possession and trading of cryptocurrencies.

Bitcoin’s high levels of volatility have also contributed towards some skepticism. Since the start of the year, it has traded at levels ranging from around $30,000 to a new record high of around $63,000 on Tuesday.

In March, Federal Reserve Chairman Jerome Powell said high volatility was the key reason bitcoin and other cryptocurrencies could not replace the dollar. Various governments are however working on central bank digital currencies, which would work similarly to cryptocurrencies, but be regulated and overseen by central banks and national regulatory bodies.

Kraken’s Powell said he believed any kind of ban on using cryptocurrencies might be too late and only serve to increase interest in digital assets. “It would certainly send a message that the government sees this as a superior alternative to their own currency”, he said.

Last week, Securities and Exchange Commission commissioner Hester Pierce – whose nickname is “crypto mom” – said she saw no possibility for a governmental ban on bitcoin. She said even if it was forbidden, people would still carry on trading it.

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Coinbase rival Kraken could go public next year after a surge in bitcoin trading volumes

Screenshot 2021 04 09 at 09.37.54
Kraken co-founder and CEO, Jesse Powell.


Kraken is considering a stock market listing next year after the crypto exchange saw record bitcoin trading volume in the first quarter of 2021, CNBC reported on Thursday.

“We’re looking at being able to go public sometime next year,” Kraken CEO Jesse Powell told CNBC. “It would probably be a direct listing, similar to Coinbase.”

Kraken saw a massive boost from bitcoin hitting an all-time high of $61,725 in mid-March, Powell said, as a number of institutional investors piled into the space. He said any volatility is good for the company, but is even better when prices are going upwards.

Four times as many users signed up to Kraken in the first quarter than did in the second half of 2020, according to CNBC. Spot transaction volumes hit a record $160 billion in the same timeframe, or about 1.5 times higher than last year.

“The first quarter just completely blew away the entirety of last year,” Powell said, adding that the company beat last year’s numbers by the end of February and the whole market “really just exploded.” The total value of the cryptocurrency market exceeded $2 trillion this week after doubling in just two months.

Kraken is currently in talks with investors about another round of fundraising that could give it a valuation of $20 billion. The CEO said this is being delayed in order to evaluate how Coinbase’s IPO performs. But they aren’t in a rush to raise capital.

US rival Coinbase is set to go public on the Nasdaq next week at an expected valuation of $100 billion. The exchange reported preliminary revenues of about $1.8 billion for the first quarter and said it has 56 million verified users.

Companies that choose to go public via direct listings, like Spotify did in 2018, avoid paying hefty fees to investment banks that otherwise act as underwriters in a traditional IPO.

Instead, employees and investors convert their shares into stock that gets listed on a stock exchange. These can then be publicly purchased. Investors can then cash out without having to consider the lock-up period – the length of time after a traditional IPO during which shares cannot be sold by insiders.

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