The big dump in the crypto market has dragged down the IPO wave in the US, with many companies postponing their listing plans.

According to a report by Bloomberg, the U.S. IPO market faced a chill in the fourth quarter of 2025, with new stocks raising over $50 million averaging a fall of 5.3%, while the five crypto companies listed this year saw their stock prices plummet by an average of 31%, significantly underperforming the S&P 500 index, which rose by 0.9% during the same period. Crypto firms such as Grayscale Investments Inc. and BitGo Holdings Inc. are facing a more severe listing environment, with bankers predicting that the crypto IPO theme may not regain momentum until 2026. Despite the challenging market conditions, companies like Kraken have submitted confidential listing applications, laying the groundwork for a potential recovery next year.

Encryption IPO Faces Severe Tests

In the fourth quarter of 2025, the performance of the new stock market in the United States was weak, with IPOs (excluding special purpose vehicles such as closed-end funds and blank check companies) that raised more than $50 million averaging a fall of 5.3%, in stark contrast to the 0.9% rise of the S&P 500 index during the same period. Against this backdrop, the IPOs in the encryption industry became one of the most severely affected sectors, with the 5 cryptocurrency companies that have gone public this year averaging a decline of 31% this quarter, highlighting the heavy pressure that the big dump in digital asset prices has placed on the valuations of related listed companies.

This market performance has raised widespread concerns about the recent IPO prospects for cryptocurrency companies. Grayscale Investments, as a cryptocurrency ETF provider, publicly submitted its IPO application on November 13, while the cryptocurrency infrastructure company BitGo had already publicly submitted its listing documents on September 19. In the current market environment, both companies face unprecedented challenges and may need to reassess their listing timelines or adjust their pricing expectations. Joseph Schuster, founder of the index provider IPOX, pointed out: “Cryptocurrency may become the least popular industry as investors have already suffered significant losses.”

Despite facing numerous difficulties, some companies may still choose to complete their listings in December, although they may need to lower their pricing expectations. Schuster added that companies are not completely unable to complete their listings before the end of the year, but they must maintain a more pragmatic attitude toward valuation expectations. This shift in market sentiment not only affects encryption companies but also poses challenges for all companies planning to go public in the near term, reflecting a significant decline in investor risk appetite.

Individual Stock Performance and Market Volatility

The big dump in encryption prices that began in early October has led to a total evaporation of digital asset value exceeding $1 trillion, but even before this round of falls, the market's reaction to encryption IPOs was mixed. The stock price of Gemini Space Station Inc., the encryption exchange founded by the Winklevoss twins, dropped 14% from the issuance price of $28 in September to the end of the third quarter. The performance of social trading platform eToro Group Ltd. was even worse, with its stock price falling by more than one-fifth from its listing in May to September 30.

Those companies that performed steadily before the big dump have not been spared from difficulties. The institutional encryption exchange Bullish, led by Tom Farley, went public in August, and its stock price has declined by 38% since early October. Even the retail investors who eagerly participated in the June IPO of stablecoin issuer Circle Internet Group Inc. have witnessed the company's stock price roughly halve during the same period. However, Bullish and Circle, along with the blockchain-based messaging company Figure Technology Solutions Inc., currently have stock prices that remain above their issuance price levels.

A positive aspect of the recent volatility in the encryption market is that it has led to higher trading volumes, which benefits the business of exchanges. This month, the 14-day average trading volume of Bitcoin reached its highest level since March. This increase in trading activity may provide some support for the performance of exchange-type companies, but in the context of an overall market decline, this positive factor is often overlooked by investors.

Key Performance of Crypto-Related IPOs in 2025

Gemini Space Station: Issue price 28 USD, down 14% by the end of Q3

eToro Group: fell over 20% from May listing to September 30

Bullish: Listed in August, down 38% since October

Circle Internet Group: Listed in June, has fallen about 50% since 10.

Industry average performance: 5 encryption companies averaged a 31% fall in Q4

Banker Strategies and Market Expectations

Investment bankers are still eager to complete more IPOs in the narrow time window between Thanksgiving and Christmas, but some underwriters have temporarily given up their efforts. John Foraker, CEO of children's food manufacturer Once Upon A Farm PBC, stated in a LinkedIn post on Sunday that he has decided to postpone the company's IPO until 2026, noting that the government shutdown “has created obstacles.” This case reflects the various challenges currently facing the IPO market, which are not only industry-specific issues but also broader political and economic uncertainties.

David Erikson, a visiting professor at Columbia Business School, pointed out that the health of the current market, including the prospects for more encryption-related companies to go public, may depend on whether the market can welcome a “Santa Claus rally.” He explained, “If investors' existing portfolios are already in trouble, unless the newly listed companies are very unique, they won't be excited about new things.” This sentiment represents the mainstream mentality of the current market, with investors becoming more cautious and enthusiasm for new stock investments noticeably cooling down.

Despite facing short-term challenges, all signs indicate that bankers expect the encryption IPO theme to become active again in 2026. The crypto trading platform Kraken revealed last week that it has secretly submitted an IPO application. Kevin Moss, Managing Director and Portfolio Manager at Private Shares Fund, stated, “There has been a significant backlog of companies waiting to go public for years.” He sees a “ready-to-launch” group of companies across multiple industries looking to go public next year. “Unless unforeseen events occur, many of these companies' plans to proceed with their IPOs remain intact.”

The fundamentals of the encryption industry and the market divergence

The challenges faced by the current encryption IPO market have diverged to a certain extent from the industry fundamentals. Although there has been a significant pullback in digital asset prices, the adoption of blockchain technology continues to advance, and institutional participation is also on the rise. This divergence reflects the different time dimensions in the valuation of encryption assets by public market investors and industry participants. Public market investors are more focused on short-term price performance, while industry participants are looking at the long-term potential for technological transformation.

From the trading volume data, the activity level of the encryption market has not shrunk due to the price fall, but has instead achieved growth amid fluctuations. The average trading volume of Bitcoin on the 14th reached its highest level since March, indicating that market participation is still increasing. This trading activity creates a continuous source of income for exchange-type companies and supports the long-term value of related enterprises. However, in the IPO market, investors are more focused on profitability and growth prospects rather than just trading volume indicators.

The encryption industry is also undergoing structural adjustments, with varying performances across different segments. Exchanges, custody services, and infrastructure providers may exhibit stronger resilience against falls, while upstream companies that directly rely on asset prices face greater pressure. This differentiation means that investors need a more refined analytical framework when evaluating encryption company IPOs and cannot simply categorize the entire industry as a single investment theme.

Historical Comparison and Cycle Positioning

Placing the current encryption IPO market's predicament in a broader historical context reveals that the wave of listings in emerging technology industries often follows similar patterns. During the late 1990s internet bubble, a large number of tech companies rushed to go public, only to face severe sell-offs in the market adjustment phase. Compared to that time, the current wave of listings by crypto companies appears more cautious, with a limited number of listed firms and relatively lower levels of valuation inflation.

From the perspective of market cycles, encrypted assets have gone through multiple cycles of boom and bust, with each downturn laying the groundwork for the next wave of innovation and growth. The bear market of 2018-2019 spurred the development of emerging fields such as DeFi and NFT, while the current market adjustment may be creating conditions for the next wave of innovation. For crypto companies seeking to go public, choosing to push forward with an IPO during a market downturn may face valuation pressure, but it can also filter out investors who truly believe in the long-term prospects of the industry.

Compared to traditional technology IPOs, cryptocurrency companies face unique challenges and opportunities when going public. On one hand, they need to deal with regulatory uncertainty, asset volatility, and the perception gap of traditional investors; on the other hand, they can leverage a global user base, network effects, and industry growth potential to attract investment. This uniqueness means that the evaluation framework for cryptocurrency IPOs needs to be adjusted and cannot simply apply the valuation models of traditional technology companies.

Future Outlook and Investment Strategy

Looking ahead to 2026, the encryption IPO market may present a more differentiated pattern. Industry-leading companies with clear profit models and robust balance sheets may be the first to break through the market gloom and complete their listing plans. In contrast, companies with unverified business models that heavily rely on rising asset prices may face longer waiting periods. This differentiation will prompt investors to pay more attention to the fundamentals and long-term competitiveness of companies, rather than simply their industry labels.

For investors looking to establish a position in this field, the current market environment presents both challenges and opportunities. On one hand, the weak performance of newly listed stocks has undermined investor confidence, leading to valuation pressure across the sector; on the other hand, the prevailing pessimism in the market may have created opportunities to acquire quality companies at reasonable prices. Historical experience shows that in emerging technology sectors, periods of lowest market sentiment are often the best entry points for long-term investments.

From an investment strategy perspective, investors may need to adopt a more flexible approach to participate in the encryption IPO market. This includes, but is not limited to, participating in pre-listing financing rounds, accumulating positions in batches during post-listing volatility, and indirectly obtaining industry risk exposure through tools like ETFs. Additionally, focusing on encryption companies that are closely linked to the traditional economy and have diverse revenue sources may provide a better risk-return balance. As the market gradually matures and the regulatory framework becomes clearer, encryption IPOs are expected to become a more mainstream investment theme.