Author: Nancy, PANews

The fierce confrontation between Trump and Musk ignited the war of public opinion. While the crypto market was hit by the callback, Circle ushered in a highlight moment in the capital market. On June 5, the stablecoin giant officially landed on the New York Stock Exchange. The stock price soared at the opening, becoming the focus of the market and bringing rich returns to investors.

The stock price surged by 168% on the first day of listing, triggering multiple circuit breakers

Circle (ticker symbol "CRCL") has finally been listed on the New York Stock Exchange. It is another crypto-core company to debut in the traditional capital market after Coinbase, Robinhood, etc., marking a milestone moment in the field of stablecoins.

Circle initially planned to adopt a more conservative issuance strategy, but the market response before the listing was extremely enthusiastic, and its subscription demand far exceeded expectations. In the end, Circle raised the issue price from the initial range to US$31, and the total number of shares issued was also expanded to 34 million shares, with a total fundraising of nearly US$1.1 billion. The oversubscription ratio of this round of IPO was as high as 25 times.

This capital feast, which was in short supply, also caused considerable controversy. For example, Arca, a long-term partner, only received a placement share of US$135,000, far lower than its US$10 million subscription application. Arca's Chief Investment Officer Jeff Dorman publicly stated that Circle "prioritizes traditional financial institutions" and has "no respect" for crypto-native institutions, and announced that it would close Circle accounts and switch to alternative stablecoins such as USDT.

Circle's performance on the opening day was also exceptionally strong, with the price of CRCL soaring to over $100 at one point, and the circuit breaker mechanism was triggered several times due to excessive trading. The final share price closed at $83.23, up 168% from the issue price, with a total market value of $18.4 billion and a trading volume of over 47.78 million shares, equivalent to about $4.014 billion.

This unexpected market performance also exceeded the first-day performance of many previous crypto companies. According to Decrypt, from the perspective of market value, Circle's market value at the close of the first day reached $18.4 billion. Although it is not as high as the $85 billion on the first day of listing of Coinbase, the largest crypto exchange in the United States, and the $29 billion of the financial technology platform Robinhood, it has significantly exceeded the $5.4 billion of the multi-asset trading platform eToro and the $224 million valuation of the Bitcoin reward platform Fold when it merged through SPAC. In terms of stock price increase, Circle's first-day surge was 168%, far ahead of its peers. In comparison, Coinbase's first-day increase was 31%, Fold's was 30%, eToro only recorded a slight increase of 4%, and Robinhood fell 8% on the day of listing.

"Cold inside, hot outside": Crypto circles are indifferent to IPOs, while traditional institutions are enthusiastic about them

"12 years ago, we founded this company with a grand vision to reshape the global economic system, fundamentally reimagining and rebuilding it at the Internet-native level. Our mission is to enhance global economic prosperity through frictionless value exchange. This mission has always driven our work. When I founded Circle, I told every employee and investor: This is an opportunity that spans decades, and I hope to build a platform that can continue to have a profound impact on the Internet technology landscape. Now, more than a decade later, we have just begun to realize our original vision. Our transformation into a public company is a significant milestone. This means that the world is ready to upgrade and migrate to an Internet-based financial system." Circle CEO Jeremy Allaire wrote when Circle went public, emphasizing that from the beginning, Circle has focused on building a trustworthy, transparent, compliant, ethical and well-governed company. Today, following the high standards of supervision of the New York Stock Exchange and the U.S. Securities and Exchange Commission will further deepen Circle's commitment to these principles. This is not only an important moment for everyone at the individual level, but also a key node in the development of the global economic system - an important moment for its irreversible integration with the Internet.

It is worth mentioning that, according to Decrypt, Paolo Ardoino, CEO of Tether, the biggest competitor, once questioned Circle's profitability in an interview before Circle went public. He said, "The market doesn't buy into their financial and information disclosures. I guess they can't make any money at all." He believes that Circle and other companies' strategy of embracing Wall Street is short-sighted. He even said that as the United States is advancing stablecoin legislation, if necessary, Tether will launch a compliant version of stablecoin products for the U.S. market, and the existing USDT will continue to serve emerging markets.

Regarding the fact that Circle's stock price on the first day exceeded expectations, Tom Dunleavy, partner of investment institution Varys Capital, pointed out that "this is mainly due to the current popularity of the stablecoin sector and the fact that many investors have previously underestimated this field. After all, you can't buy Tether's equity at all."

Arthur Hayes, co-founder of BitMEX, posted on social media that the crypto industry is shifting from the ICO boom in 2017 to the IPO frenzy of 2025-2027. He predicted that this wave of craze will end with a large IPO similar to EOS, which will attract a lot of legal currency capital but perform poorly after opening.

The cumulative investment exceeded US$2.2 billion, and multiple rounds of investment institutions have achieved a hundredfold return

After many years and many twists and turns, Circle finally became the first "bell ringer" in the stablecoin track. For a number of investment institutions, this long run and bold bet finally ushered in the highlight moment of cashing in on paper.

According to public data from Crunchbase, Circle has completed nine rounds of financing (including IPO) so far, with a total financing amount of more than US$2.2 billion. With the IPO, the estimated return rates of multiple financing rounds have gradually surfaced. The following is the return rate of each round calculated based on Circle's current market value of approximately US$18.4 billion (some valuations are public information, and undisclosed financing rounds are not included in the statistics). But it is worth mentioning that the publicly disclosed C round of financing has a return of more than 90 times, so it can be imagined that the return rates of multiple rounds of financing before the C round exceeded 100 times.

Round C: 91.78 times

In April 2015, Circle announced that it had received $50 million in Series C funding, with a pre-investment valuation of approximately $200 million. Investors included IDG Capital, GS Growth, Accel, Pantera Capital, Oak Investment Partners, General Catalyst, Fenway Summer Ventures, and Digital Currency Group. Based on Circle's current market value of approximately $18.4 billion, the book return rate for Series C investors was as high as 91.78 times.

Round D: 43.7x

In May 2016, Circle announced that it had received $60 million in Series D funding, with a pre-investment valuation of $420 million. Investors included IDG Capital, Baidu Ventures, Fenbushi Capital, Breyer Capital, China Everbright Holdings, CICC, CreditEase, Glenn Hutchins, Tusk Venture Partners and CE Innovation Capital. The book return on this round of investment is expected to be about 43.7 times.

Round E: 6.33x

Circle announced in May 2018 that it had raised $110 million in Series E funding, with a pre-investment valuation of $2.9 billion, including participation from IDG Capital, Digital Currency Group, Bitmain, General Catalyst, Tusk Venture Partners, To Kenz Capital, Pillar VC, COIND and Breyer Capital. Although the valuation was significantly raised in this round, it still achieved a return of about 6.33 times based on the current market value.

$440 million in private equity: 4.48x

In May 2021, Circle announced that it had raised $440 million. Participants in this round of financing included Fidelity, FTX, Digital Currency Group, Marshall Wace, Valor Capital Group, Pillar VC, Intersection Fintech and Willett Advisors LLC, with a pre-investment valuation of $4.1 billion. Based on the current market value, the return on this round is about 4.48 times.

$400 million in private equity: 2.51x

In April 2022, Circle announced a $400 million financing agreement with BlackRock, Fidelity Management & Research, Marshall Wace and Fin Capital, with a pre-investment valuation of $7.3 billion. Due to the high valuation, the book return of this round is relatively limited, currently about 2.51 times.

IPO: 2.96 times

Recently, Circle completed its IPO at $31 per share, raising approximately $1.1 billion, with a listing valuation of $6.2 billion. The specific list of investors in this IPO was not disclosed, but for investors who entered in the late rounds, the current return rate is about 2.96 times.

It should be noted that Circle chose the conventional IPO route this time, rather than SPAC (special purpose acquisition company) or direct listing. This not only means that it is willing to accept more stringent review and compliance processes, but also has more market value. The shares of its early investors, founding team and employees usually face a "lock-up period" ranging from 90 to 180 days to prevent concentrated cashing out in the short term from causing drastic fluctuations in stock prices. Even if it needs to be sold in advance, special approval from the lead underwriter (such as Goldman Sachs, JPMorgan Chase, etc.) is required. In those years, Coinbase took the liquidity-first path of direct listing, and most of its internal holdings could be traded freely on the first day, resulting in heavier market selling pressure and more drastic stock price fluctuations in the early stages of listing.