The recent move by RIT Capital Partners, a $5.3 billion investment trust, to acquire a stake in the well-regarded crypto exchange Kraken is stirring up excitement—and perhaps some raised eyebrows—in both finance and crypto circles.
Who Exactly is RIT Capital Partners?
London-based RIT Capital Partners, known for its rich history tied to the Rothschild banking family, made headlines with this strategic acquisition. Chairman Jacob Rothschild seems not just to be banking on tradition but is also keeping a keen eye on the future—specifically the digital future.
An Impressive Track Record
- Founded in the early 1960s
- Held its initial public offering on the London Stock Exchange in 1988
- Currently boasts a market cap exceeding $5 billion
Why Kraken?
So, what’s the big deal about Kraken? Investor James Glass described it as “one [of] the world’s biggest crypto exchanges,” proudly boasting a large client base of over 6 million users. Established in 2011, Kraken has carved out its niche as the fourth-largest exchange by trading volumes. But that’s not just fluff; these stats translate into significant market influence.
Looking to the IPO Horizon
The investment trust is not just throwing darts in the dark. As Glass hints, there’s a strategic eye towards a potential direct listing for Kraken in 2022. And given the booming appetite for cryptocurrencies, leveraging Kraken’s existing rapport with customers seems like a sound plan:
“Kraken is considering going public after record trading volumes,” Glass noted.
Market Comparisons: Kraken vs. Coinbase
RIT Capital has likely taken a page from watching Kraken’s rival, Coinbase, as it has successfully navigated its way through an IPO that had traders buzzing. During Q1 2021, Coinbase reported revenues of an eye-popping $1.8 billion. In the last 24 hours alone, Kraken processed over $2 billion in trading volume, while Coinbase held a steady $3.9 billion. Clearly, there’s room for rambunctious growth in this sector.
Investment Potential and Future Growth
Though RIT Capital hasn’t disclosed how much cash it has shelled out for this stake, the buzz around new fundraising rounds—potentially pushing Kraken’s valuation to between $10 billion and $20 billion—has to be enticing. Financial heavyweights such as Fidelity and General Atlantic are reportedly in discussions, indicating that there is quite an audience for what Kraken might be bringing to the table.
Previous Crypto Ventures
This isn’t RIT Capital Partners’ first tango with the cryptocurrency market. Back in December 2020, the firm contributed to a $142 million investment round for Paxos, a partner of PayPal’s and a notable player in stablecoins. Clearly, they have a vested interest in the crypto sphere and are keen to reap the rewards.
The Wrap-Up
As RIT Capital Partners continues its foray into the burgeoning world of cryptocurrency by eyeing Kraken, there’s no telling what kind of impacts this could have on the market. With a blend of tradition and modernity, one can only wait and watch as these financial titans navigate this brave new digital world.
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