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Public markets are springing back to life. The crypto industry, considering its reputation for disrupting the legacy system, is actually breathing life back into it. The exuberance of the oversubscribed Circle ($CRCL) IPO, whose share price skyrocketed nearly 10x after its public debut, has catalyzed excitement for the crypto companies across Wall Street. It’s no surprise that Gemini, FalconX, and Bullish are among the crypto firms preparing for IPOs of their own. There’s a simultaneous flurry of special purpose acquisition companies and reverse mergers of public companies rushing to the market, especially those busily acquiring crypto assets on their balance sheets. Meanwhile, podcaster Eleanor Terrett reported the U.S. Securities and Exchange Commission is exploring ways to streamline crypto exchange-traded fund applications to forgo the required 19b-4 filing. When it comes to crypto companies, public markets are open for business.
Despite this recent glimmer of hope, injected by crypto bull market excitement, overall public companies are struggling. In his 2024 letter to shareholders, JPM CEO Jamie Dimon said, “Our public markets have been shrinking dramatically, which I do not believe is a good thing. The number of public companies has gone from 7,300 in 1996 to 4,000 today – it should be 15,000 today.”
Blaming overly zealous regulation, Dimon continued: “Regulations should encourage, rather than discourage, companies to go public.” In 2024, 176 companies in the U.S. raised a mere $33 billion through their IPOs. Just 20 years prior, in 2004, $43 million was raised across 233 companies. With the exception of the COVID anomalies of 2020-2021, where an unprecedented level of liquidity was injected into markets, the IPO market has been anemic at best. So far, in 2025, crypto companies (and companies investing in crypto) are proving to be the most resilient and adaptable players in an otherwise lethargic public market.
This is not the first time that Wall Street has been swept up in blockchain mania. In 2017, Long Island Ice Tea Corp. rebranded to “Long Blockchain Corp.” and saw its share price surge 200%. The blockchain bubble eventually burst and the crypto industry entered a protracted bear market. While skeptics will suggest that this cycle is no different, there is a bigger change brewing beneath these headlines that could have an enduring impact on public markets. This is the metamorphosis of market structure itself–now made possible by integrating blockchain technology–and supported by a pro-crypto SEC.
It’s expensive to go public. To IPO, companies work with investment bankers to build a syndicate of buyers and set an opening price. Underwriting fees can cost up to 7% of funds raised. Add compliance, audit and legal costs, and fees to go public typically reach into the millions of dollars. The costs do not stop there.
It’s also expensive to stay public. Since a string of high profile accounting scandals, including Enron, rocked markets in the early 2000s, the Sarbanes-Oxley Act of 2002 materially increased the ongoing compliance and reporting burden for public companies. According to a Harvard study in 2022, audit fees alone cost public companies an average of over $2 million per year. Former SEC Chair Gensler did not help matters. His relentless focus on enforcement actions, in addition to tighter disclosure rules on a range of corporate issues like climate change, added to the burden — and cost — of being public.
It’s no surprise that companies are staying private. According to Blackrock, 81% of companies with over $100 million in revenue are privately held in the U.S. The issue with private markets is that they are indeed private, depriving ordinary people from investing in the most exciting and innovative companies.
The new SEC is poised to address this. Last month at the Crypto Task Force Roundtable on Tokenization, SEC Chairman Paul Atkins noted, “A key priority of my Chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law.” When it comes to issuance, direct listings on blockchains could be the answer.
Unlike traditional IPOs, which are supported by investment bank middlemen, direct listing is a form of going public that allows companies to issue shares directly and let market forces set the price. Blockchains are an obvious technology to support transfer agents, which are organizations that manage company stockholder records. By wrapping securities as tokens and issuing them on blockchains, anyone in the world with an internet connection could theoretically buy them 24 hours a day, seven days a week.
The SEC would need to allow this in order for it to become the norm. Last month, the Solana Policy Institute, along with a consortium of crypto leaders, proposed a direct listing framework to the SEC’s Crypto Task Force. Under this proposed model, issuers could issue “their token shares” directly on blockchains. Disclosures and registration would remain, and a series of exemptions from current regulations would be needed for the proposal to work.
The markets seem to be ready. While memecoins, like dogecoin ($DOGE), have no intrinsic value or utility, there has been abundance of willing buyers. Last year, the combined market capitalization of memecoins soared to a whopping $140 billion . Robinhood ($HOOD) seems to think that those buyers would remain if it offered tokenized equities. This week it announced 24 hour-a-day stock trading for customers in Europe, supported by its own blockchain.
If tokenized equity direct listings are allowed, this wouldn’t be the first time the SEC helped an innovative new product get off the ground.
Equity tokens could be the new ETFs. In the 1990s, SEC Chairman Richard Breeden pushed a reluctant SEC staff to allow ETFs in the United States. By “wrapping” previously inaccessible (and, at times, sophisticated) assets as a security, retail investors could trade ETFs seamlessly from their brokerage account. By 2024, ETFs had grown to become a $13 trillion industry.
When Breeden championed innovation through the launch of ETFs, he had an astute Chief of Staff.
His name was Paul Atkins. It may be no coincidence that Atkins was sworn in as the new SEC chairman in April, nominated by the pro-bitcoin President Donald Trump. It remains to be seen whether this approach to fintech regulation will revive public markets.
