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

Text: EeeVee, Jia Liu, BlockBeats

Editor: Kaori

On August 12, following Coinbase, the second cryptocurrency exchange will officially land on the New York Stock Exchange—Bullish plans to raise approximately $990 million through its initial public offering (IPO).

On the surface, this is just another routine appearance in the cryptocurrency industry. In the past six months, the impressive IPO performances of companies like Circle and Figma, along with Coinbase's inclusion in the S&P 500, have opened the appetite of the U.S. stock market for cryptocurrency companies.

Bullish's debut seems to be a continuation of this trend, and it may even be the most flamboyant one yet. This exchange, which has $3 billion in assets, has not only received strong support from top investors like Peter Thiel, Alan Howard, and SoftBank but has also acquired the cryptocurrency media giant CoinDesk, firmly holding the "microphone" with the most influence in the industry. Its CEO, Tom Farley, was formerly the chairman of the New York Stock Exchange.

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

However, beneath Bullish's glamorous resume lies a past that could stir memories in the crypto circle, including the direction of its massive financing, the rift between the community and capital, and a forsaken public chain—EOS.

Li Xiaolai, the "evangelist" of EOS, once wrote in his WeChat Moments on August 10, 2018, "Let's look at EOS again in seven years." Ironically, seven years later, what the community sees is not the growth of EOS but the glory of Bullish ringing the bell—a company with no connection to EOS.

$4.2 Billion Betrayal

If one were to describe the relationship between Bullish and EOS in one sentence, it would probably be—former and current, both aware of each other yet unable to sit together again.

After the news of Bullish secretly submitting its IPO application broke, the price of EOS tokens surged by 17%, creating an illusion of rekindled old feelings. However, in the eyes of the EOS community, this increase felt more like irony, as the former operator Block.one had 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, where white papers could serve as entry tickets, and visions were the best fundraising tools. Block.one launched EOS with the boast of "one million TPS, zero fees," attracting a rush of global investors.

In 2018, it raised $4.2 billion through an ICO, setting a record for fundraising in the cryptocurrency industry, and EOS was crowned as the "Ethereum killer."

However, the myth collapsed faster than expected. Shortly after the mainnet went live, users discovered an insurmountable chasm between reality and the white paper: transfers required staking CPU and RAM, making the process cumbersome and the threshold high; node elections quickly devolved into a game of voting warehouses for large holders and exchanges, rather than the anticipated "decentralized democracy."

Technical flaws were merely the surface; deeper fissures stemmed from unequal resource allocation.

Despite Block.one's promise to allocate $1 billion to support the EOS ecosystem, $2.2 billion of the $4.2 billion raised was ultimately used to purchase U.S. Treasury bonds to lock in low-risk returns, as well as for stock trading, acquiring Silvergate (which went bankrupt in 2023), and other investment attempts.

The funds that truly flowed into the EOS developer ecosystem were embarrassingly small.

The final straw that broke the patience of the EOS community was Bullish's debut in 2021. Block.one announced the launch of this brand-new cryptocurrency trading platform, raising as much as $1 billion, yet it had no connection to the EOS technology system—no use of the EOS chain, no support for EOS tokens, and no acknowledgment of any relationship with EOS, not even a symbolic thank you.

In the eyes of the EOS community, this was a blatant betrayal: Block.one raised massive funds using EOS but chose to start anew and make a glamorous turn at the peak. EOS was left behind, losing its original resources and spotlight.

Subsequently, the community attempted multiple counterattacks, trying to reclaim funds and governance rights through negotiations and lawsuits. Although they ultimately expelled Block.one from the EOS management, the ownership and control of the funds remained firmly in Block.one's hands.

For those old users who experienced both the highs and lows of EOS, Bullish was never a new project unrelated to them but rather a coronation bought with their ideals—glamorous, expensive, yet embarrassing.

Bullish's $1 Billion New Starting Point

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

It also attracted a host of well-known investors, including Peter Thiel, Alan Howard (investors in FTX and Polygon), as well as top venture capital firms like Galaxy Digital, DCG, and SoftBank, creating a luxurious lineup.

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 in its seed and Series A funding stages.

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

This technological innovation quickly gained favor with institutional clients, allowing Bullish to successfully become the fifth-largest cryptocurrency exchange globally.

While steadily growing its exchange's core business, Bullish acquired the globally leading cryptocurrency media platform CoinDesk in 2023, further consolidating its voice in the industry. CoinDesk's monthly unique visitor count reached 4.96 million in 2024.

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

Additionally, Bullish established a venture capital division—Bullish Capital. Through this business, Bullish can invest in cryptocurrency innovation projects, which not only bring potential capital returns to Bullish but also help it maintain its industry-leading position and achieve diversified layouts. Currently, Bullish Capital has invested in several well-known cryptocurrency projects, including Ether.fi, Babylon, and Wingbits.

In terms of financial performance, Bullish's revenue sources remain relatively singular, with spot trading revenue 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 it held, such as Bitcoin and Ethereum.

In terms of other revenue, CoinDesk's revenue saw considerable growth, with subscription revenue reaching $20 million in the first quarter of 2025, more than doubling from $9 million in the same period of 2024.

This growth was partly driven by $9 million in sponsorship revenue from 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 profitability appear somewhat lacking. Since 2022, Coinbase's revenue has consistently remained over 20 times that of Bullish. Additionally, Kraken's total revenue of $1.5 billion in 2024 far exceeded Bullish's $214 million during the same period.

In terms of business data, Bullish's spot trading volume has shown impressive growth, with a trading volume of $79.9 billion in the first quarter of 2025, even slightly surpassing Coinbase.

This trading volume is comparable to leading exchanges, but the revenue is significantly lagging, primarily due to Bullish's proactive reduction of trading spreads.

"The strategy of tightening spreads has strengthened our competitive position and captured a larger market share," according to the prospectus. In 2024, Bullish's market share in global BTC and ETH spot trading volumes increased by 10% and 37%, respectively, while in 2023, they grew by 31% and 189%.

However, this strategy of expanding market share by compressing spreads does not bode well for the future.

On one hand, as institutional investors gradually enter, the market matures, and trading increasingly concentrates on leading assets like BTC, leading to narrowed volatility.

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

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

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

$4.8 Billion Valuation: Is it "Low-Key" or Something Else?

Bullish's confidence in using massive funds for future acquisitions largely stems from that historic financing—the $4.2 billion raised by Block.one through the EOS ICO in 2018.

In addition to allocating a significant portion of these funds to stable U.S. Treasury bonds and sporadic equity investments, Block.one also heavily invested in 160,000 Bitcoins early on.

This move made it the largest private holder of Bitcoin globally, surpassing the stablecoin giant Tether by a full 40,000 Bitcoins.

As of the first quarter of 2025, Bullish's balance sheet also appears substantial: total assets exceeding $3 billion, including 24,000 Bitcoins (approximately $2.8 billion), 12,600 Ethereum, and $418 million in cash and stablecoins.

In contrast, Coinbase's Bitcoin reserves in the second quarter of the same year were only 11,776 Bitcoins, valued at about $1.3 billion—this means that in terms of BTC holdings alone, Bullish is nearly twice that of Coinbase.

This asset depth makes Bullish appear somewhat "low-key" in the face of a $4.8 billion IPO valuation. On August 11, the company significantly raised its issuance plan at the last moment—the price range per share was adjusted from $28-31 to $32-33, and the issuance scale was expanded from 20.3 million shares to 30 million shares—directly responding to the market's enthusiastic demand.

According to the prospectus, BlackRock and ARK Investment Management will subscribe for $200 million worth of shares at the IPO issuance price, further fueling market enthusiasm.

However, the enthusiasm hides another set of rules. This IPO has less than 15% of its shares in circulation, with the vast majority still firmly held by major shareholders and early investors. Low circulation means scarcity, and scarcity implies the potential for a "rush for shares" on the first day, which is undoubtedly tempting for short-term funds.

As Renaissance Capital senior strategist Matt Kennedy commented on Bullish's IPO: "Bankers prefer to leave some room in the valuation to raise it on a low valuation basis rather than pricing it too high from the start, which would dampen market enthusiasm."

However, the other side of low circulation is a potential selling pressure time bomb. Once the lock-up period ends, if major shareholders and early investors choose to cash out, the market could easily experience a surge in liquidity and a chain reaction of falling stock prices.

The cryptocurrency market has seen too many similar scripts during this cycle.

It is also worth noting that this is not Bullish's first attempt to enter the capital market. As early as the peak of the cryptocurrency bull market in 2021, it planned to go public through a merger with SPAC company Far Peak Acquisition Corporation at a valuation of $9 billion. That time, regulatory uncertainty and market volatility hit the plan abruptly in 2022.

Now, as Bitcoin once again approaches the historic high of $120,000, companies like Circle have successfully tested the temperature of the capital market with their IPOs. Bullish, with a valuation nearly halved and a more carefully crafted strategy, is once again aiming for the New York Stock Exchange.

Will this combination of "valuation compression + tight circulation + bull market timing" allow Block.one's already substantial balance sheet to add another impressive appreciation?

However, for those investors who know the story of EOS, there may be a more important lesson—do not love such companies for too long, lest the final outcome replays the old dream of the EOS community's fate.