Circle’s Capital Race as the “First Stock of Stablecoin”
As the U.S. GENIUS Stablecoin Act enters a critical phase of final negotiations, Circle is simultaneously accelerating its IPO process, attempting to ring the bell at Nasdaq as the “first stock of stablecoin,” with its inaugural trading date set for June 5.
At this intersection of policy signals and market bets, after four years of pushing for an IPO, existing shareholders can finally realize substantial returns through the IPO window, gaining multiple times their initial investments; at the same time, Circle is taking advantage of favorable policies to increase its offering size and pricing range, attracting endorsements from Wall Street giants like BlackRock and JPMorgan. The underlying logic here involves a gamble on the legitimization prospects of compliant stablecoins in the U.S., as well as a reassessment of Circle’s global expansion capabilities and the dominant status of its USDC ecosystem.
Investment Institutions Greet Exit After 11 Years, Wall Street “Bails Out” with Subscriptions
After experiencing the abandonment of a SPAC listing plan in 2022, turbulent market share of USDC stablecoin, and increasingly stringent global regulations, Circle has ultimately restarted its IPO process, opening up a new channel for crypto financial companies to access traditional capital markets.
According to Circle’s initial prospectus submitted to the U.S. SEC, it intends to issue 24 million Class A common shares, with the company issuing 9.6 million shares and the remaining 14.4 million shares coming from existing shareholders. The planned pricing range is set at $24 to $26 per share. This proportion of secondary shares from investors greatly exceeds that of the primary issuance by the company, which is extremely rare in tech IPOs, typically only appearing when founders and early investors seek to partially exit at the listing stage or try to mitigate dilution effects.
However, shortly thereafter, Circle raised the IPO offering size and price range: the new plan is to issue 32 million shares, with the company’s own issuance proportion significantly increased to 24 million shares, while the existing shareholders’ sale scale is reduced to 8 million shares, and the pricing range is adjusted to $27 to $28 per share. At the high end, this transaction could raise up to $896 million, bringing the company’s valuation close to $6.2 billion, and if potential dilution factors such as employee stock ownership plans, restricted stock units (RSUs), and warrants are considered, the fully diluted valuation would be approximately $7.2 billion.
Notably, the list of shareholders participating in this share sale includes not only Circle co-founders Jeremy Allaire and Sean Neville but also several well-known venture capital firms, including Accel, Breyer Capital, General Catalyst, IDG Capital, and Oak Investment Partners, with these institutions averaging a share sale proportion of 8%-10%. According to PANews’ statistics on financing time, these institutions’ investment timelines date back to 2013, spanning over 11 years.
Compared to the unsuccessful SPAC transaction in 2022 (when the valuation was $9 billion), this IPO returns at a slightly lower valuation but with a more robust structure and more positive market feedback. According to Bloomberg, Circle’s IPO subscription orders have exceeded the number of shares available for issuance by several times. For instance, the tech investment firm ARK Investment Management (founded by Cathie Wood) has expressed interest in purchasing up to $150 million worth of Circle stock; simultaneously, global asset management giant BlackRock plans to purchase about 10% of the IPO shares, estimating an investment amount of approximately $86.4 million to $89.6 million based on the pricing range.
Pricing Strategy May Reserve Growth Potential, Coexistence of Growth and Concerns
At this crucial juncture of accelerated compliance evolution in the stablecoin sector and the mainstreaming of the crypto industry, Circle’s submission of the IPO prospectus represents not just a sprint in capital markets but also an “arbitrage” on the U.S. regulatory cycle. Once successfully listed, Circle will become the first stablecoin issuer to enter the U.S. stock market, symbolically comparable to Coinbase’s listing moment years ago.
With strong profitability, solid compliance advantages, extensive market expansion capabilities, and endorsements from traditional financial giants like BlackRock, Circle has constructed a narrative framework for high-quality assets. On one hand, according to the prospectus, Circle’s total revenue is projected to reach $1.676 billion in 2024, representing approximately a 15.6% year-on-year increase from $1.45 billion in 2023. Currently, the stablecoin market is in a period of rapid expansion, but projects with strong profitability and clear financial data are few and far between, making Circle’s revenue growth a rare label.
Moreover, the core product USDC is already the second-largest stablecoin globally, with a market capitalization exceeding $61.4 billion. Although there remains a significant gap in market share between USDC and USDT, USDC has built a strong cognitive moat in terms of compliance, transparency, and regulatory oversight. Furthermore, USDC’s multi-chain deployment (including Ethereum, Solana, Base, and Avalanche) and continuous expansion into DeFi, payments, and cross-border settlement scenarios have supported its gradual market capitalization recovery.
It is noteworthy that Circle and BlackRock have become staunch allies, even temporarily abandoning their own stablecoin issuance to support USDC. The prospectus disclosed a strategic partnership with global asset management giant BlackRock. In the new Memorandum of Understanding (MOU) signed in March 2025, BlackRock will serve as the preferred partner for Circle’s stablecoin reserves and has committed not to issue competitive U.S. dollar payment stablecoins. Both parties agreed that Circle would entrust at least 90% of its U.S. dollar custodial reserves (excluding bank deposits) to BlackRock for management, while BlackRock shall not develop or release its own stablecoin. This agreement is valid for four years. This collaboration not only strengthens USDC’s risk resistance from a liquidity management perspective but also brings trust endorsements from traditional financial markets to Circle.
On the other hand, Circle’s valuation strategy possesses growth potential. The valuation corresponding to Circle’s IPO is approximately $7.2 billion, with an issue price range of $27 to $28 per share. Based on its estimated net income of $155 million in 2024, the price-to-earnings ratio is about 45.61 to 47.30 times. In the current capital environment where global tech sector valuations are generally high and risk appetite is tightening, Circle’s valuation is not exaggerated within the crypto industry and can even be considered rational pricing, possessing considerable attractiveness. For comparison, Coinbase’s price-to-earnings ratio was as high as 300 times at its initial listing.
More critically, Circle is seizing the window of the GENIUS Act. The timing of Circle’s IPO choice is not coincidental but rather a precise gamble on the U.S. regulatory cycle. With the GENIUS Act making key progress in U.S. stablecoin legislation and proposing a clear regulatory framework for U.S. dollar stablecoins, this means that stablecoin issuers will enter a new phase of “licensed operation.” In other words, the GENIUS Act presents Circle with a combination of regulatory arbitrage and market reassessment benefits, allowing it to complete compliance endorsement ahead of the formal implementation of the act and secure recognition from investors and policymakers through a Nasdaq listing.
However, despite Circle’s impressive revenue growth, there are notable vulnerabilities in its profit structure. Previous reports from PANews have pointed out that, first, Circle’s revenue currently relies on U.S. Treasury yield rates, which are essentially cyclical benefits. If the Federal Reserve enters a rate-cutting cycle, Circle’s reserve income capability will face systemic declines.
Second, Circle’s profit margins are structurally squeezed by multiple partners. According to the information in the prospectus, Coinbase, as its core partner, has the right to receive up to 50% of the profits from the USDC reserve earnings. In 2024, Circle is expected to pay Coinbase a revenue share amounting to $900 million, accounting for a significant portion of its annual income. Additionally, Circle’s collaboration with Binance has also revealed high incentive costs, as in November 2024, Circle paid Binance a one-time advance payment of $60.25 million and committed to monthly incentives based on its USDC custodial balance, provided that Binance holds no less than $1.5 billion in USDC. This strategy of relying on leading platforms to gain market share can drive up the market value but significantly compresses Circle’s actual profit margins.
In summary, Circle’s IPO application is not only a phased validation of its business model but also reflects its keen insight into the regulatory environment and financial cycle. However, whether Circle can truly fulfill the expectations of being the “first stock of stablecoin” will depend on how it navigates the increasingly complex regulatory framework and fluctuations in financial cycles, finds the optimal path to balance innovation and compliance, and continuously optimizes its profit structure to steadily advance its global expansion.