ARK Invest Predicts Trump Win Could Fuel Crypto IPO Surge

Last week’s election victory by Donald Trump may signal a turning point for crypto companies looking to go public, according to a recent newsletter from Cathie Wood’s ARK Invest. The global asset manager predicts that Trump’s leadership, especially with the potential for a new Securities and Exchange Commission (SEC) chair, could create an environment favorable for Initial Public Offerings (IPOs) in the crypto sector.

“With Bitcoin reaching record highs, the new Administration seems poised to bring much-needed clarity to U.S. digital asset regulations,” wrote Frank Downing, ARK Invest’s director of research. He noted that clearer regulations could drive IPO activity, especially if Republican-controlled Congress passes crucial legislation.

Potential Legislative Boost: FIT21 and Stablecoin Clarity

The newsletter highlights two key bills: the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2023. These acts, which are progressing through Congress, aim to establish clearer rules for digital assets and stablecoins. Downing suggests that these bills are more likely to advance under a Trump administration and a Republican-controlled House and Senate, which may be more open to crypto-friendly regulations.

The FIT21 Act would define jurisdictional boundaries between the SEC and the Commodity Futures Trading Commission (CFTC), potentially removing some regulatory hurdles for companies such as Circle and Kraken, which have been eyeing IPOs. Coinbase’s 2021 direct listing marked a milestone for crypto companies, but regulatory pressure under SEC Chair Gary Gensler has since stifled further crypto IPOs.

Circle and Kraken Eye Public Listings

Stablecoin issuer Circle has long aimed to go public, with a confidential IPO filing earlier this year. However, SEC scrutiny around stablecoins has slowed the process. Circle’s recent move of its global headquarters from Boston to New York City, and its planned office at One World Trade Center by 2025, signal its commitment to a public listing.

Crypto exchange Kraken, too, raised $100 million in pre-IPO funding in June, but regulatory uncertainties continue to present obstacles for a potential listing.

Cathie Wood Calls for “Defanging the SEC”

Cathie Wood, CEO of ARK Invest and a prominent Bitcoin advocate, recently shared her perspective on how a Trump-led administration could ease regulatory pressure on the digital assets sector. In a video posted Monday, Wood described the SEC under Gary Gensler as a “menace to the digital assets movement” and suggested that reining in the agency could “turbocharge the U.S. economy.”

With Trump’s victory and a potentially new SEC leadership, ARK Invest believes crypto companies could finally gain the regulatory clarity needed to pursue IPOs. The FIT21 Act and other legislative efforts may provide a framework for stablecoins and digital assets, opening the door for firms like Circle and Kraken to go public. As crypto markets continue to rally, the stage may be set for a new wave of public listings in the digital assets sector.