Circle IPO Surges: Shares Hit $97, Valuing Stablecoin Issuer at $16B

Opening Bell: Circle made its public market debut yesterday and markets roared in approval. Shares opened at $31 and soared as high as $97, before settling at $82.80 by the close, giving the stablecoin issuer a market capitalization of over $16 billion.

• Why it matters: This marks only the second major U.S. crypto IPO after Coinbase’s 2021 listing — and the second-strongest first-day performance of any IPO in the U.S. this year. It’s a powerful signal of investor confidence in crypto equities and could pave the way for more public listings in the sector.

Source: Bitwise

Not acquired — but desired: Until recently, Circle’s IPO wasn’t guaranteed. Both Ripple and Coinbase were rumored to have explored acquisition talks, though Ripple CEO Brad Garlinghouse publicly denied making a formal bid this week.

IPO by the numbers: Circle raised nearly $460 million in primary capital, selling 14.8 million shares at $31 each. Existing shareholders sold an additional 19.2 million shares into the offering.

• CEO numbers: Among them was CEO Jeremy Allaire, who sold 1.5 million shares, earning approximately $49 million, according to the prospectus.

Who’s buying: Combined with momentum around U.S. stablecoin regulation, Circle’s strong day-one demand was likely fueled by speculation that BlackRock — a key Circle partner — would purchase up to 10% of the offering. ARK Invest, too, committed $150 million.

Vlat is an Investment Partner at Moonrock Capital, a Munich-based crypto-native advisory and investment firm.

Many investors came away skeptical after Circle’s S-1 filing in April — pointing to revenue-sharing agreements with Coinbase and the risk of falling interest rates eating into yield. But those concerns may be overstated. They overshadow the fundamentals: Circle is the largest regulated onshore stablecoin issuer, deeply embedded in DeFi, and well connected in Washington.

Judging by the IPO’s oversubscription and rising valuation, institutional investors seem to agree. And while falling rates compress yields, they can also boost onchain activity by making DeFi yields more attractive — potentially increasing USDC’s supply and offsetting revenue declines through scale.

Historically, the primary demand for stablecoins has come from their role as trading pairs on centralized exchanges (CEXs). Giving up net interest margin to Coinbase was a tradeoff to achieve distribution and scale a broader payment network. As stablecoins shift toward use in payments and remittances, Circle could pivot to a transaction-based model akin to Mastercard or Visa. With CCTP and the Circle Payment Network, there's a credible path to build both technical and regulatory moats.

Tom Dunleavy is the Head of Venture at Varys Capital, a global, multi-strategy digital asset fund and venture capital firm. Prior to joining Varys Capital, Tom worked at MV Global and Messari.

Circle is basically a business line of Coinbase.

Most of the revenue comes from interest on reserves — and Coinbase takes the lion’s share: 100% of the yield on USDC held on their platform, and 50% elsewhere. That’s a tough setup, especially with interest rates likely heading lower.

The current investor interest? Mostly driven by stablecoin fervor and folks vastly underexposed or sidelined there. You can't invest in Tether.

But the fundamentals don’t convince me. Market share is down from 35% to 25%, and competition is heating up fast. If you’re bullish on crypto infrastructure, just buy Coinbase. More exposure. Better optionality.