Crypto IPO boom stalls as AI frenzy reshapes tech markets, says Fundstrat exec

Latest developments: Hardware wallet maker Ledger and MetaMask developer ConsenSys are among crypto companies delaying IPO plans.

Fundstrat Head of Digital Asset Strategy Sean Farrell told CoinDesk's Jennifer Sanasie on Public Keys that crypto trading volumes are down roughly 75% year-to-date, pressuring valuations across publicly traded crypto firms.

Farrell said companies are reluctant to go public in a weak market because IPOs represent a critical fundraising opportunity and firms want to maximize valuations for existing investors.

Ledger had reportedly lined up Goldman Sachs, Jefferies and Barclays for a planned $4 billion New York Stock Exchange listing before pausing those plans.

Farrell said many crypto IPO processes are already “70% to 80% along the way,” positioning firms to move quickly once markets recover.

The contrast: AI-linked companies are still finding strong demand in public markets.

Farrell said the current IPO market is “wide open” for emerging technology firms tied to artificial intelligence.

He pointed to a broader equity rally driven primarily by AI-related stocks, even as other sectors face macroeconomic headwinds.

Farrell said investors continue pouring money into AI infrastructure because hyperscalers are racing to expand computing capacity despite inflation and rate concerns.

The divergence highlights how crypto companies remain more exposed to falling token prices and weaker retail trading activity.

What this means: Bitcoin miners pivoting into AI infrastructure have become one of the stronger-performing corners of the crypto market.

Farrell said many miners control valuable energy infrastructure and power purchase agreements that can be repurposed for AI data center demand.

He said those firms are generating higher returns by leasing power and infrastructure capacity to AI companies instead of relying solely on Bitcoin mining.

Farrell said investors are increasingly valuing some miners as “digital REITs” because of their infrastructure exposure.

He added that AI-linked crypto infrastructure names have been “a great place to hide” during broader crypto market weakness.

The macro backdrop: Farrell said interest rates and inflation remain major obstacles for crypto IPO activity.

He said stronger labor market data and hotter inflation prints have reduced expectations for near-term Federal Reserve rate cuts.

Farrell warned that continued pressure on long-term Treasury yields could weigh on risk assets over the next several months.

Farrell said he expects eventual monetary easing once AI-driven productivity gains spread through the economy and labor market weakness reemerges.

Until then, he expects crypto firms to remain cautious about entering public markets.

Worth watching: Farrell highlighted Hyperliquid as one of the few crypto ecosystems outperforming in 2026.

Farrell said Hyperliquid generated roughly $850 million in trailing twelve-month revenue and recently partnered with Coinbase to make USDC the platform’s canonical stablecoin.

He estimated the Coinbase partnership could add roughly $150 million in annualized non-cyclical revenue.

Farrell also pointed to growing interest in Hyperliquid’s pre-IPO trading markets, including contracts tied to companies like Cerebras and SpaceX.

Farrell said those markets could become a major narrative and revenue driver for the protocol.

The complication: Regulatory scrutiny remains the biggest risk facing Hyperliquid.

CME Group and Intercontinental Exchange have reportedly pushed regulators to examine Hyperliquid’s offerings more closely.

Farrell acknowledged regulators could target products tied to U.S. equities or commodities trading.

Still, he argued the scrutiny also signals traditional exchanges increasingly view Hyperliquid as a competitive threat.

Farrell said Hyperliquid’s partnership with Coinbase may help the protocol navigate Washington more effectively as U.S. crypto regulation evolves.