Bitpanda, an Austrian cryptocurrency exchange, will not list on the London Stock Exchange due to low trader activity and liquidity issues that may jeopardize IPO success.
Issues with the London Stock Exchange
Co-founder and CEO Eric Demuth stated that the London Stock Exchange does not have enough active buyers and sellers for companies to succeed when going public. He emphasized that strong liquidity is essential for investor confidence in company shares, and noted that London struggles to compete with larger markets like New York and Frankfurt.
Choosing New York and Frankfurt
Demuth referred to the British payments company Wise, whose shareholders recently voted to move their primary listing to New York. Bitpanda believes that New York offers deeper capital markets and greater investor demand compared to London. Liquidity is one of the most critical factors for companies considering an IPO.
Future of IPOs and the UK Market
The UK IPO market has fallen to its weakest level in three decades, leading many companies to doubt whether London can offer the deep liquidity they require. Demuth argues that Bitpanda sees no reason to list in London when other financial centers provide more favorable conditions. While he admits London may recover in the future, the company's strategy currently focuses on more liquid markets.
Bitpanda's decision to avoid the London IPO reflects the current state of the capital markets in the UK and a growing trend among crypto companies to move towards more favorable financial platforms.
