Bullish, a cryptocurrency exchange backed by Peter Thiel, has confidentially filed for an initial public offering (IPO) with the US Securities and Exchange Commission (SEC).

Bullish is a subsidiary of blockchain software firm Block.one.

The company previously attempted to go public through a special purpose acquisition company (SPAC) in 2021.

However, this effort was abandoned in 2022 due to regulatory challenges and rising interest rates.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Crypto companies capitalize on regulatory window amid administration change

Bullish’s IPO filing reflects how crypto companies are leveraging shifts in the regulatory climate under the current administration.

The previous administration’s enforcement-heavy approach pushed many crypto entrepreneurs abroad, but the current administration has positioned itself to make the U.S. more crypto-friendly through executive orders establishing new regulatory frameworks 1.

This policy shift includes appointing pro-crypto figures to key positions and creating a Crypto Task Force aimed at improving industry collaboration 2.

Gemini’s recent confidential IPO filing just days earlier 3 and Bullish’s renewed attempt after its failed 2021 SPAC merger suggest crypto exchanges are strategically timing their market entries to take advantage of this regulatory shift.

The administration’s rollback of rules that imposed burdensome reporting requirements 4 has created a more favorable environment for crypto businesses seeking public market validation.

2️⃣ IPO timing strategies during crypto market cycles

Bullish’s IPO filing highlights how companies often aim to go public during periods of renewed investor optimism to maximize valuation.

Historical data shows that Bitcoin rose significantly during the 2017-2021 period and experienced notable volatility thereafter, with regulatory uncertainty influencing market sentiment 5.

Research suggests that IPOs during “hot markets” often lead to inflated valuations due to high investor optimism, which can result in poor long-term performance as seen with many public offerings 6.