Stablecoin "first stock" Circle opened up 122% on its first day of trading in the US IPO, closing up nearly 170% | IPO Insights
Stablecoin "first stock" Circle Internet Group Inc. (CRCL) opened on its first day of trading in the U.S. IPO with a 122% increase, priced at $69, far exceeding the previously set IPO issue price of $31 per share. Circle's stock surged as much as 235% during the day, reaching a high of $103.75. As of Thursday's close, Circle's stock rose nearly 170%
On Thursday local time, the stablecoin "first stock" Circle Internet Group Inc. (CRCL) opened on its first day of the U.S. IPO with a 122% increase, trading at $69, far exceeding the previously set IPO issue price of $31 per share. Circle's stock surged as much as 235% during the day, reaching a high of $103.75. By the close of U.S. markets on Thursday, Circle had risen nearly 170%, significantly outperforming the broader U.S. stock market.
As of Thursday's close, Circle's trading volume for the day was approximately 46 million shares, far exceeding the number of freely tradable shares available in the market.
The market showed enthusiasm for Circle's IPO performance. The IPO, priced on Wednesday evening, was well above the expected range of $27 to $28 for the week and also higher than the initially set range of $24 to $26 from the previous week, bringing its valuation to approximately $6.8 billion before the Thursday opening. Circle raised nearly $1.1 billion through this IPO.
Circle has become one of the few pure cryptocurrency public companies in the U.S. market, following Coinbase, Mara Holdings, and Riot Platforms. This is the company's second attempt at going public, as a previous merger with a special purpose acquisition company (SPAC) failed due to regulatory issues at the end of 2022.
Circle CEO Jeremy Allaire stated on Thursday:
To achieve our vision, we must build relationships with the government and collaborate with policymakers. If you want this technology to enter the mainstream, it must operate within mainstream society, and clear rules are needed. We have always been one of the most licensed, regulated, compliant, and transparent companies in the entire industry, which has brought us good results.
The cryptocurrency industry is gaining new support under the current U.S. government, which is friendly to crypto policies. Particularly in the stablecoin sector, the market expects that the U.S. Congress will pass relevant legislation this summer. Wall Street analysts predict that this sector could grow tenfold in the next five years, becoming a trillion-dollar market opportunity.
Allaire co-founded Circle in 2013, initially headquartered in Boston, focusing on consumer payment, cryptocurrency wallet, and exchange services. In 2015, Circle became one of the first companies to obtain New York's stringent BitLicense. Earlier this year, the company relocated to New York.
Circle launched the USDC stablecoin, pegged to the U.S. dollar, aiming to establish a standard for fiat currency on the internet. The stablecoin was launched in 2018 in partnership with Coinbase through a consortium called Centre. In 2023, the two companies dissolved Centre, with Circle taking over the operation of USDC, while Coinbase became a minority shareholder in the stablecoin companyThe two companies also reached an agreement to share the revenue from USDC. Coinbase CEO Brian Armstrong stated in a recent earnings call that the company has a "grand goal - to make USDC the number one stablecoin."
USDC is currently the second-largest stablecoin in the market, second only to Tether's USDT.
Stablecoins are a type of cryptocurrency whose value is pegged to other assets, typically the US dollar. While they have traditionally been used as intermediary currencies for crypto transactions, interest in stablecoins is growing among banks and payment companies, especially with the Trump administration relaxing the crypto policies of the Biden era and the expectation that the U.S. Congress will provide legislative support for the system.
In particular, companies with non-traditional cryptocurrency users are beginning to see the efficiency and cost advantages that stablecoins can bring in remittances, corporate payments, and e-commerce. At the same time, stablecoins remain a key component of the tokenized financial market. There are views that stablecoins can help maintain the dominance of the U.S. dollar - partly because dollar-denominated stablecoins are almost entirely backed by U.S. Treasury bonds - and this sentiment is increasingly gaining traction
