Encryption Companies Going Public: How to Properly Value to Attract Wall Street Capital

Recently, the listing of encryption companies has sparked widespread discussion in the market about their valuations. Taking Coinbase as an example, its stock price experienced a surge of 52% at the opening, followed by a significant correction, reflecting the market's difficulty in pricing innovative financial infrastructures. On the other hand, Circle was severely undervalued on its first day of listing, becoming one of the most conservatively priced IPOs in recent decades. These cases highlight the urgent need for a more flexible price discovery mechanism in the encryption industry.

To address this issue, industry experts have proposed a new token transparency framework aimed at enhancing the level of project information disclosure to reach IPO standards. This framework requires project parties to calculate revenue separately by entity, disclose the ownership of internal wallets, regularly submit reports for token holders, and disclose details of liquidity management, among other things. This not only helps reduce the discount rate of investor risk but also attracts more institutional investors to participate, while accelerating the regulatory approval process.

In terms of valuation methods, experts suggest incorporating the unique attributes of blockchain. For example, Ethereum's token burn mechanism is similar to stock buybacks, and staking rewards are akin to stable dividends. Therefore, "issued amount minus burned amount" should be regarded as free cash flow for valuation. Additionally, on-chain activity data such as stablecoin flows and cross-chain bridging are also key factors supporting token prices.

Tokenization of stocks is another trend worth noting. The recent launch of tokenized stock products by a trading platform has sparked discussions between permissionless finance and permissioned finance. While the permissionless model offers broader global access, it also faces risks of market manipulation; on the other hand, although the permissioned model is more regulated, it may limit the popularization of tokenized stocks.

DeFi protocols have also made their mark in this field. For example, a certain protocol sets up oracles, leverage, and funding parameters through token staking, enabling anyone to create a perpetual contract market for tokenized stocks. This open and programmable model may become a prototype for future global financial markets.

It is worth mentioning that by 2025, Bitcoin's market value has surpassed Google, reaching $2.128 trillion, ranking as the fifth largest asset in the world. This milestone event confirms the tremendous potential of programmable currency.

Looking to the future, the integration of encryption assets and traditional financial markets will further accelerate. Digital asset treasuries and encryption IPOs provide exposure to encryption in the public market, while stablecoins and tokenization technologies optimize traditional market structures. It is foreseeable that in the next decade, encryption technology will evolve from a niche topic into a core technology that supports daily life.