Bullish IPO, why is the valuation less than 10% of Coinbase?

Written by: EeeVee, Jaleel 加六

On August 12, following Coinbase, the second cryptocurrency exchange is set to officially list on the New York Stock Exchange - Bullish plans to raise approximately $990 million through its initial public offering.

On the surface, this is just another routine appearance in the crypto industry. The impressive performances of IPOs from companies like Circle and Figma over the past six months, along with Coinbase being included in the S&P 500, have already whetted the appetite of the US stock market for crypto companies.

The bullish debut seems to be a continuation of this trend, possibly the most ostentatious one yet. This exchange, which has $3 billion in assets sitting on its books, has not only secured strong support from top investors such as Peter Thiel, Alan Howard, and SoftBank but also acquired the crypto media giant CoinDesk, firmly holding the "microphone" with the most influence in the industry. Its CEO, Tom Farley, previously served as the chairman of the New York Stock Exchange.

The strong background and aura have made investors' demand for Bullish's IPO "especially strong," prompting Bullish to increase its fundraising scale from $629 million to $990 million on the eve of the IPO.

However, beneath Bullish's shiny resume lies a past that is enough to stir memories in the crypto community, including the whereabouts of massive funding, the rift between the community and capital, and a neglected public chain - EOS.

Li Xiaolai, the "propagandist" of EOS, wrote in his social media on August 10, 2018, "Let's look at EOS again in seven years." Ironically, what the community sees seven years later is not the growth of EOS, but the glory of Bullish ringing the bell - a company that has nothing to do with EOS.

Betrayal of 4.2 billion dollars

If I were to describe the relationship between Bullish and EOS in one sentence, it would probably be - exes and current partners, both tacitly understanding each other, yet finding it hard to sit together again.

After the news of Bullish secretly submitting an IPO application broke, the price of EOS tokens surged by 17%, as if reigniting an old flame. However, in the eyes of the EOS community, this surge feels more like an irony, as the former operator Block.one has long turned its back and embraced Bullish, leaving EOS behind—at the cost of its decline.

The story begins in 2017. At that time, the public chain track was in its golden age, and white papers could serve as tickets for entry, with visions being the best financing tools. Block.one launched EOS with the bold claim of "one million TPS and zero fees," attracting global investors to rush in.

In 2018, it raised $4.2 billion through an ICO, breaking the financing record in the cryptocurrency industry, and EOS was also dubbed the "Ethereum killer."

However, the myth collapsed faster than expected. Shortly after the mainnet went live, users found a chasm between reality and the white paper that was hard to bridge: transfers required staking CPU and RAM, making the process cumbersome and the threshold high; node elections were not the "decentralized democracy" that was anticipated, but quickly devolved into a game of vote-buying among large holders and exchanges.

Technical defects are just the surface; deeper cracks stem from uneven resource distribution.

Despite Block.one's promise to allocate $1 billion to support the EOS ecosystem, out of the $4.2 billion in financing, $2.2 billion was ultimately used to purchase U.S. Treasury bonds, as well as investments in BTC, stock trading, the acquisition of SilverGate (which went bankrupt in 2023), and the purchase of the Voice domain name.

The funds that truly flow into the EOS developer ecosystem are embarrassingly few.

The last straw that broke the patience of the EOS community was the emergence of Bullish in 2021. Block.one announced the launch of this brand new crypto trading platform, with a funding scale of up to $1 billion, but it has no connection to the EOS technology system—no use of the EOS chain, no support for EOS tokens, no acknowledgment of any relationship with EOS, and not even a symbolic thank you.

In the eyes of the EOS community, this is a blatant betrayal: Block.one raised huge amounts of money through EOS, yet turned around and started anew at the peak, leaving EOS behind, losing its original resources and spotlight.

Bullish financing 1 billion new starting point

Born out of the shattered dreams of EOS, Bullish initially received support from Block.one with a cash injection of $100 million.

At the same time, it has attracted a number of well-known investors, including Peter Thiel and Alan Howard (investors in FTX and Polygon), as well as top venture capital firms such as Galaxy Digital, DCG, and SoftBank, making the lineup quite luxurious.

This allowed Bullish to have an initial capital of up to $1 billion early on, a figure far exceeding its competitor Kraken, which only raised $65 million during its seed and Series A funding rounds.

Since 2021, Bullish's core business has revolved around its exchange. With its innovative hybrid liquidity model (a combination of CLOB and AMM), Bullish can offer low trading spreads in high liquidity environments while maintaining stable market depth in low liquidity environments.

This technological innovation has quickly gained favor among institutional clients, enabling Bullish to successfully rank as the fifth largest cryptocurrency exchange in the world.

While steadily growing its core business as an exchange, Bullish acquired CoinDesk, a global leading crypto media platform, in 2023, further consolidating its influence in the industry. CoinDesk's monthly unique visitor count reached 4.96 million in 2024.

Bullish has also launched CoinDesk Indices and acquired CCData in 2024, leveraging the strengths of both in data services to help its institutional clients track the performance of digital assets and provide market data insights.

In addition, Bullish has established a venture capital division - Bullish Capital. Through this business, Bullish is able to allocate capital to crypto innovation projects, which not only brings potential capital returns to Bullish but also helps it maintain a leading position in the industry and achieve diversification. Currently, Bullish Capital has invested in several well-known crypto projects including Ether.fi, Babylon, and Wingbits.

In terms of financial performance, Bullish's current revenue sources are still relatively single, with spot trading income from its exchange accounting for 70% to 80% of total revenue.

According to the prospectus, Bullish reported a net loss of $349 million in the first quarter of 2025, primarily due to a significant decline in the fair value of the cryptocurrency assets held by the company, such as Bitcoin and Ethereum.

In terms of other income, Coindesk's revenue saw significant growth. In the first quarter of 2025, CoinDesk's subscription revenue reached 20 million dollars, up from 9 million dollars in the same period of 2024, a year-over-year increase of over 100%.

This growth partly comes from the $9 million in sponsorship revenue generated by the Consensus Hong Kong 2025 conference held in Hong Kong in February 2025.

Compared to its main competitors Coinbase and Kraken, Bullish's revenue and profits are somewhat inferior. Starting from 2022, Coinbase's revenue has been consistently more than 20 times that of Bullish. In addition, Kraken's total revenue of $1.5 billion in 2024 far exceeds Bullish's $214 million during the same period.

In terms of business data, Bullish's spot trading volume has shown remarkable growth. In the first quarter of 2025, Bullish's trading volume reached 79.9 billion dollars, even slightly surpassing Coinbase.

This trading volume is comparable to leading exchanges, but the revenue is significantly lagging, primarily due to Bullish actively lowering trading spreads.

"The strategic measures to tighten the spread have strengthened our competitive position and captured a larger market share," according to the prospectus, Bullish's market share in global BTC and ETH spot trading volume grew by 10% and 37% respectively in 2024, and by 31% and 189% respectively in 2023.

However, the prospect of this strategy, which relies on compressing spreads to expand market share, is not optimistic.

On one hand, as institutional investors gradually enter the market, it matures, and trading becomes more concentrated on leading assets like BTC, leading to reduced volatility.

On the other hand, the launch of ETFs further intensifies competition among exchanges. These changes will compress the market's trading spreads, thereby affecting Bullish's profitability and competitive advantage.

In the face of increasingly fierce market competition, Bullish's competitive strategy is similar to that of leading exchanges like Coinbase - using the derivatives market and acquisitions to develop a second growth curve:

"We anticipate that in the future we will meet the ongoing demand of stable, high-value institutional clients through the expansion of products, especially options products, to achieve growth. We will continue to leverage our scale, assets, and expertise to acquire companies that align with our business lines."

A valuation of 4.8 billion, is it "low-key" or is there another plot?

The reason why Bullish has the confidence to use huge amounts of capital for acquisitions in the future largely owes to that financing event that has gone down in the history of cryptocurrency - the $4.2 billion raised by Block.one through the EOS ICO in 2018.

In addition to allocating a large amount of funds to stable U.S. Treasury bonds and sporadic equity investments, Block.one also heavily invested in 160,000 bitcoins in the early stages.

This move instantly made it the largest private company in the world by the amount of cryptocurrency held, surpassing the stablecoin giant Tether by a full 40,000 coins.

The balance sheet of Bullish also appears very substantial: total assets exceed 3 billion USD, including 24,000 Bitcoins (approximately 2.8 billion USD), 12,600 Ethereum, and 418 million USD in cash and stablecoins.

In contrast, Coinbase's Bitcoin reserves in the second quarter of the same year were only 11,776 coins, with a market value of approximately $1.3 billion - which means that, in terms of BTC holdings alone, Bullish is almost twice that of Coinbase.

This asset thickness makes Bullish appear somewhat "low-key" in front of a $4.8 billion IPO valuation, making it more like a digital asset reserve company rather than just an exchange.

At a valuation of 4.8 billion, the premium rate of this crypto stock (mNAV) is only 1.6. This "low-key valuation" has sparked strong demand from investors for this IPO, with the market sentiment being enthusiastic.

On August 11, the company significantly adjusted its issuance plan at the last moment—the price range per share was raised from $28-31 to $32-33, and the issuance scale was expanded from 20.3 million shares to 30 million shares. On August 12, the issuance price was again raised to $37.

The prospectus also stated that BlackRock and ARK Investment Management will subscribe for $200 million worth of shares at the IPO issue price, which undoubtedly adds to the optimistic sentiment.

But behind the enthusiasm lies another set of game rules. This IPO has less than 15% of its shares circulating, with the vast majority still firmly held by major shareholders and early investors. Low circulation means scarcity, and scarcity means the "rush for shares" that may occur on the first day, which is highly tempting for short-term funds.

As Matt Kennedy, a senior strategist at Renaissance Capital, commented on Bullish IPO: "Bankers prefer to leave some room in valuations, lifting them from a lower base rather than pricing too high from the start, which would dampen market enthusiasm."

However, the other side of low circulation is a potential time bomb of selling pressure. Once the lock-up period ends, if major shareholders and early investors choose to cash out, the market is likely to experience a chain reaction of sudden liquidity increase and price drops.

The script-like encryption market has been seen too many times in this cycle.

It is also worth noting that this is not Bullish's first attempt to enter the capital market. Back in 2021, during the peak of the crypto bull market, it planned to go public at a valuation of $9 billion by merging with the SPAC company Far Peak Acquisition Corporation. That time, regulatory uncertainty and market volatility struck simultaneously, causing the plan to come to an abrupt halt in 2022.

Now, Bitcoin is once again challenging the historical high of $120,000. Companies like Circle have gauged the temperature of the capital markets with successful IPOs. Bullish, with a valuation nearly halved and a more refined strategy, is once again attempting to enter the New York Stock Exchange.

Can this combination of "valuation suppression + circulation tightening + bull market timing" further enhance the already substantial book assets of Block.one?

However, for those investors who are aware of the EOS story, there may be a more important revelation - do not love such companies for too long, lest the final outcome reenacts the old dream of the EOS community's fate.