Jesse Powell is having second thoughts about unleashing the Kraken directly on public markets.
Powell is the chief executive officer of Kraken, one of the most richly valued cryptocurrency startups. He previously told CNBC that his exchange is considering a public debut via direct listing in 2022 as the soaring price of Bitcoin and its ilk led to record trading volumes over the course of the pandemic.
Subscribe to The Ledger for expert weekly analysis on fintech’s big stories, delivered free to your inbox.
But Powell is having second thoughts about that approach. After seeing the tumultuous performance rival crypto trading platform, Coinbase, after it went public via direct listing in April, Powell told Fortune’s Balancing The Ledger show that he is taking a harder look at a more traditional initial public offering.
Founded in 2012, Coinbase was the first major cryptocurrency company to test the public’s appetite with its stock market sale. The move cemented Coinbase’s position as a bellwether for many other crypto businesses also looking for capital to match their rapid growth. So far, Coinbase’s performance has been choppy: Valued as $68.1 billion shortly following its direct listing, the largest U.S. exchange by volume now sits at about $47 billion.
In conversation with Fortune’s hosts Robert Hackett and Anne Sraders, Powell ascribed much of Coinbase’s choppiness to the peculiarities of direct listing. Unlike an IPO, in which bankers have greater control over the pricing process, a direct listing allows more of the price discovery to happen organically by the market. In a direct listing, existing shareholders also aren’t barred from selling their shares at debut, unlike in typical IPOs. That often means a larger supply of shares go on sale, which can push the price downward.
“An IPO is looking a little more attractive in light of the direct listing’s performance,” Powell said on the episode released Thursday. “I would say we’re looking at it more seriously now having the benefit of seeing how the direct public offering played out for Coinbase.”
The CEO reiterated that he hopes to make a public debut in the second half of 2022.
By then, “hopefully we’ll have more analyst coverage out, and there’s just more of a track record of growth for the industry that people feel like they can rely on,” he said. A more experienced market could create better conditions for other crypto businesses looking to make debuts.
Powell’s consideration of a more typical IPO instead of a direct listing is especially striking because it would presumably include more input from the usual Wall Street bankers in its road to a public debut. Crypto proponents have been among the most acerbic critics of financial institutions. As Coinbase CEO Brian Armstrong told CNBC in April, the direct listing process is in many ways “more true to the ethos of crypto.”
But as the crypto movement has ballooned, the upstarts and older banks have had to become strange bedfellows in some cases, with the former finding benefits in the resources that the banks have built up and the latter scared to lose out on future innovations. Still, that hasn’t stopped crypto advocates from calling out Wall Street for being slow on the uptake.
“I think [Wall Street is] just so tied up in the legacy way of doing things,” Powell said when asked about Coinbase’s spotty stock performance. The incumbents have “a lot to lose from the success of this space. I think you might be seeing people facing this cognitive dissonance of becoming increasingly aware of the impending doom of the legacy financial system.”
While Powell didn’t rule out either a direct listing or an IPO, he did cross out a major investment banking breadwinner of the pandemic: a special purpose acquisition company. “It might have been possible a few years ago, but today, I think we’re too big to consider doing a SPAC,” he said.
Clarification (6/11; 5:50 P.M. ET): Powell previously said Kraken may go public in the second half of 2022. An earlier version of this article suggested he had only said the company would seek a 2022 IPO in past interviews. The headline has also been adjusted for clarity.
More must-read finance coverage from Fortune:
This story was originally featured on Fortune.com