Does Kraken’s fundraise value Binance above $100B?
Jesse Powell’s crypto exchange Kraken is seeking $500 million at a $15 billion valuation, a 36% increase from its $11 billion valuation in 2022.
That price anchors a comp for the world’s largest crypto exchange, Changpeng Zhao’s Binance, at more than $100 billion.
Using a traditional price-to-sales (P/S) ratio, Kraken is seeking a 10x multiple of its $1.5 billion in 2024 revenue. Powell wants that valuation ahead of his initial public offering (IPO) in 2026.
Unfortunately, Kraken has been seeking a $15 billion valuation for many years. As early as winter 2021, Powell was fundraising in the $10-20 billion range.
Still, Kraken’s latest fundraise creates a new method for peer analysis of the world’s largest crypto exchange.
Kraken, the newest valuation tool for Binance
Domestically, Kraken is the second-largest US crypto exchange after Coinbase, which is publicly valued at $97 billion. Globally, Kraken ranks eighth by trading volume per CoinGecko and 14th per Binance’s CoinMarketCap.
For years, crypto exchanges have remained private, obscured from public market valuation as they quietly operate profitable enterprises. Kraken’s fundraising and Powell’s potential IPO create a new method for peer analysis of Binance.
At $15 billion, Kraken’s corporate valuation represents a 10x multiple of its $1.5 billion revenue in 2024. Kraken reported $665 billion in trading volume for 2024.
Binance, in comparison, generated $16.8 billion in 2024 revenue — 11 times greater than Kraken’s $1.5 billion. Interestingly, Bloomberg contests Binance’s self-reported figure, estimating corporate revenues at just $9.8 billion over the past 12 months.
Binance processed $7.4 trillion in spot trading volume alone in 2024 — at least 11 times greater than Kraken’s maximum $665 billion.
Importantly, Kraken must truthfully report trading volume and revenues under US financial disclosure regulations if it files for an IPO.
Binance, in contrast, has never indicated plans to file IPO documentation, is not headquartered within the US, and doesn’t have an obligation to follow US accounting standards.
The mix of Kraken’s trading volume denominated in USD dwarfs the percentage of USD trading volume at Binance. For many reasons, it’s far easier and somewhat less reliable for valuation purposes to generate and report stablecoin- and crypto-denominated transactions.
Nonetheless, Binance is certainly far larger than Kraken.
By customer base, Binance serves over 275 million registered customers — 18 times more than Kraken’s 15 million.
Finally, Binance has an estimated 39% market share among all crypto exchanges per CoinGecko — 19 times larger than Kraken’s 2%.
Putting the math together
Summarizing the above metrics, Binance’s corporate revenues and spot trading volumes are both 11 times larger than Kraken. Both Binance’s customer base and market share is about 18 times larger.
Putting those numbers together, it’s safe to say that Binance is probably worth more than $100 billion. Selecting either an 11 or 18 multiplier on Kraken’s intended $15 billion valuation easily surpasses 10 dollar figures.
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On the more conservative side, Bloomberg estimates Binance’s valuation at about $58 billion. Its staff methodology includes a discretionary, 50% discount on its otherwise comparable sales- or earnings-derived valuations “due to institutional, regulatory and related risks.”
This is a particularly extraordinary choice given that Coinbase, which admits it’s smaller than Binance, is publicly traded on US markets at a $97 billion valuation.
In other words, it’s highly likely that Kraken’s latest valuation imputes a valuation of more than $100 billion for Binance.
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