Kraken CEO Jesse Powell says a traditional IPO looks more attractive than a direct listing.

Krake CEO Jesse Powell is considering a traditional IPO over direct listing after seeing Coinabse’s results. US crypto exchange giant Coinbase went public earlier this year with a direct listing on Nasdaq. Earlier, Kraken’s CEO had said that the crypto exchange was considering a public debut through a direct listing in 2022. However, after seeing the mixed results of rival crypto exchange Coinbase’s direct listing in April, Powell is having second thoughts. 

Kraken is not likely to follow Coinbase’s footsteps. 

Coinbase’s direct listing acts as a bellwether for crypto companies entering the public market and how they do so. After being valued at $68.1 billion shortly after its direct listing, the US crypto exchange is now valued at around $47 billion. In an interview with Fortune, Kraken CEO attributed much of Coinbase’s varied results to its direct listing. With more traditional IPOs, investment banks underwrite the issuing of the stock, which helps consolidate its value. This lack of institutional backing with a direct listing leaves a company’s stock price much more volatile in the market.

 Kraken CEO is leaning towards an IPO.

Traditional initial public offerings typically bar existing shareholders from selling their shares at debut. And as a consequence, a smaller supply of shares gone on sale, which eases the selling pressure, keeping the price afloat. Powell feels these factors certainly came into play for Coinbase, which is why he is leaning towards an IPO. Powell reiterated that the company hopes to make a public debut in the second half of 2022. At that point, he says, “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.”