Trump Could Clear Hurdles for Circle and Kraken to Go Public: ARK Invest

Last week’s Donald Trump victory might help crypto companies seeking to go public, according to Cathie Woods’s ARK Invest.

In a newsletter posted Tuesday, global asset manager Ark Invest predicts the change in leadership—particularly if it leads to a new SEC chair—could open the floodgates for Initial Public Offerings (IPOs) in the crypto sector.

“As the price of Bitcoin has surged to a record high, the new Administration seems poised to bring much needed clarity to the regulation of digital assets in the United States,” Frank Downing, Ark Invest’s director of research, wrote in the newsletter.

The newsletter points to potential legislative advancements, such as the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2023, which would provide clearer regulatory frameworks for digital assets and stablecoins. The odds they make progress, he argued, are significantly higher after Republicans took the House and Senate—coupled with a Trump administration that has said it will be amenable to crypto regulations.

Downing noted how these acts, which are making their way through Congress, would provide the necessary clarity on the jurisdiction of the SEC and Commodity Futures Trading Commission (CFTC), allowing firms such as Circle and Kraken to move forward with their IPO plans.

Coinbase was the first major crypto exchange to go public through a direct listing in 2021. However, regulatory challenges since then—particularly from the SEC under Gary Gensler—have dampened the growth of other crypto IPOs.

Stablecoin issuer Circle has long sought to make its debut on U.S. stock exchanges. Earlier this year, Circle filed confidentially for an IPO, but regulatory concerns, particularly from the SEC about stablecoin risks, have delayed its listing.

The company’s recent decision to relocate its global headquarters from Boston to New York City, along with plans to open an office at One World Trade Center by 2025, points to its continued pursuit of an IPO.

Crypto exchange Kraken raised $100 million in a pre-IPO funding round in June, according to a Bloomberg report. However, both companies face significant regulatory challenges before they can list publicly.

Cathie Wood, the CEO and founder of ARK Invest, is a vocal advocate for Bitcoin. In a video posted on Monday, Wood stated how “defanging the SEC” under a Trump presidency is one of the things which will likely turbocharge the U.S. economy, calling the regulatory watchdog a “menace to the digital assets movement.”

Edited by Stacy Elliott.