If the past year has taught the world anything, is that conventional thinking can be easily overturned and challenged in the digital age. The recent GameStop situation in the United States, where many common people gathered on Reddit to purchase GameStop stock in massive quantities, massively inflating its value, made us question just how Wall Street and the markets work. Tons of wealthy investors started panicking as what they thought was a safe short was quickly being turned against them, seeing their profits get swept away like nothing. This is when stock trading application Robinhood decided to pull GameStop off of its publicly available stocks, which sparked public outrage and left a sour taste in many investors’ mouths. Now, Robinhood has announced that they will be hitting public markets and confirmed that paperwork has been filed with the SEC in order to do this this week. They are far from the only fintech startup to be filing for an IPO this year, as the surging market has given birth to many other potential competitors and innovators in the sector. Some other well-known fintechs filing for IPOs are cryptocurrency trading and investing platforms Coinbase and BlockFi, neobank financial services company Chime, and financial advising app Betterment.
Coinbase is one of the most anticipated IPOs of recent announcement, filing with the SEC about a month ago. The company is spearheading the cryptocurrency exchange market, and has a hearty valuation at about €58 billion. The crypto exchange is particularly helpful as it allows investors to get involved in the space without fear of complete exposure to the dramatic swings the crypto market is infamous for having. BlockFi is a similar blockchain trading company also new to filing its IPO which allows users to put whichever cryptocurrency they decide to work with, such as bitcoin, etherium, or litecoin, as collateral for loans in government regulated currencies such as the US dollar. BlockFi has stated that interest rates can go as low as 4.5% for investors that choose to use their platform. Yahoo Finance detailed that “BlockFi also provides a crypto-based interest account where customers deposit their cryptocurrency and can earn up to 8.6% interest, far more than a standard bank savings account.” This gives them a great competitive edge among other crypto exchanges and one that may persuade users to use them over competitor Coinbase. Launching an IPO for any business is a huge move to gain funds from investors who have confidence in your ability to continue to prosper, and only time will tell if investors are ready to trust Robinhood in that space again.