For many traditional enterprises, an IPO is the endgame. The culmination of years of hard work, countless private rounds, and intensive regulatory scrutiny. The Initial Public Offering is a validation of the idea you hatched many moons ago on the back of a napkin and that has now been fully endorsed by the world’s most sophisticated investors. It’s the point at which tech startups become tech unicorns and founders walk away with a well-earned payday.
Despite operating in the parallel world of blockchain, many crypto companies harbor similar aspirations of eventually going public. But just as in traditional finance, most never get there. Circle is the exception, with its Nasdaq debut on June 5 characterized by feverish trading that saw the company’s shares rapidly triple in value. Not bad for a firm that’s in the conservative business of stablecoin issuance.
Now, as the dust settles on Circle’s memorable public debut, other crypto companies are enviously eyeing their success. They want a piece of the pie, complete with the payday and public validation this brings. Will the Circle IPO open the floodgates for a slew of crypto companies to follow suit or, like the Coinbase IPO of 2021, will it mark the market top?
Circle Goes Full Circle
While Circle’s primary business is stablecoins – 61 billion of which have now been issued onchain – its roots lie in TradFi. Unlike other crypto companies that started out largely unregulated in the wild west days before belatedly getting their house in order, Circle has been compliant since day one. In many respects, its IPO has returned it to its roots – roots that it never strayed too far from to begin with.
Nevertheless, it would be wrong to dismiss Circle’s achievement just because it isn’t a “pure” crypto company. It’s done more than most other firms to mainstream digital assets by providing a stablecoin that institutions are willing to touch and that regulators are willing to countenance. In the process, it’s eased the scrutiny that was being applied to Tether, which for a long time was the only stablecoin in town.
Crypto figures have been swift to commend Circle for its achievements, both as a profitable enterprise in its own right and as a standard-bearer for the blockchain industry. “Circle’s IPO, alongside BlackRock’s strategic investment, marks a defining moment in the convergence of traditional finance and digital assets,” commented Lingling Jiang, Partner at DWF Labs. “It’s not just about one company going public. This is a signal that stablecoins are becoming core financial infrastructure. When the world’s largest asset manager commits to a 10% stake and manages the reserves behind USDC, it sends a clear message: stablecoins are no longer experimental – this is systemic.”
Who’s Next?
Circle’s public debut provided a level of volatility that’s uncharacteristic of a company in the stablecoin business – but that’s the nature of public markets. And so far, the public likes what they’re seeing, with CRCL resembling an Up Only crypto chart. With Circle boasting a $26B market cap at the time of writing, it’s no wonder other crypto companies are eager to expedite their own IPO plans. Among the titans pondering a public listing is Gemini, which may be next to follow Circle’s lead.
The US exchange has revealed that it’s filed its IPO paperwork, with the SEC now tasked with scrutinizing Gemini’s documents. Other obvious candidates for going down this route include fellow US exchange Kraken, which has already been building bridges with Wall Street after partnering with xStocks to launch tokenized equities.
Regardless of whether Circle’s early success triggers a wave of crypto IPOs, industry figures are confident that the event will prove a net good that moves blockchain closer to the center of global finance. Circle’s achievement “will accelerate regulatory clarity, drive new capital into tokenized assets, and push more real-world utility into the onchain economy,” ventures Lingling Jiang, predicting that “the next phase of growth will demand stablecoins that are not just trusted, but programmable, globally usable, and interoperable across public and private rails. Circle and BlackRock are anchoring a U.S.-centric model. The real question now is how the rest of the world, especially Asia and emerging markets, responds. Because what’s at stake is not just market share: it’s monetary influence.”
While initial demand for Circle stock has taken most analysts by surprise, there’s still a long way to go before the company can not only justify but grow its valuation. With 98% of its current revenue derived from interest on the T-bills it holds as backing for USDC, it’s still very much anchored in TradFi. Its flagship product, USDC, currently generates very little direct revenue.
If it’s to maintain its dominance of the stablecoin market – which now faces fresh competition in the form of World Liberty Financial’s USD1 – Circle will need to do more than simply issue fiat-backed stables. Options include moving further into RWAs, which now boast a $23B cap that’s rising steadily. But in the here and now, Circle’s team can take a moment to catch their breath and enjoy the view from the summit. They’ve come a long way since Jeremy Allaire and Sean Neville founded the company in 2013. Founding members and shareholders alike will be hoping that the best is yet to come.
