Author: Nancy, PANews
Original Title: Capital Game of "Stablecoin First Stock" Circle: Old Shareholders Cashing Out, Wall Street Enters, What Should Retail Investors Do?
At a critical moment when the US GENIUS Stablecoin Bill enters the final negotiation stage, Circle has simultaneously pressed the fast-forward button for IPO, attempting to ring the Nasdaq bell as the "first stablecoin stock" and will launch its first trading day on June 5th.
At this intersection of policy signals and market bets, four years after pushing for listing, Circle's old shareholders can finally cash out through the IPO window with multiple times or even dozens of times returns; meanwhile, Circle leverages policy tailwinds to raise issuance scale and pricing range, attracting endorsements from Wall Street giants like BlackRock and JPMorgan Chase. The deeper logic behind this involves both a bold bet on the prospects of US compliant stablecoin legitimization and a re-evaluation of Circle's global expansion capabilities and USDC ecosystem dominance.
Investment Institutions Await Exit After Over 11 Years, Wall Street "Takes Over" Subscription
After experiencing the shelved SPAC listing plan in 2022, USDC stablecoin market share volatility, and increasingly stringent global regulations, Circle ultimately restarted the IPO process, opening a new channel for crypto financial companies to enter traditional capital markets.
According to Circle's initial prospectus submitted to the US SEC, the company plans to issue 24 million Class A common shares, with the company issuing 9.6 million shares and the remaining 14.4 million shares from existing shareholders, with a planned pricing range of $24 to $26 per share. This investor secondary share proportion far exceeds the primary issuance, which is extremely rare in tech company IPOs, typically only occurring when founders and early institutions desire partial exit or seek to reduce dilution impact.
However, shortly after, Circle raised its IPO issuance scale and price range: The new plan is to issue 32 million shares, with the company's self-issuance proportion significantly increased to 24 million shares, existing shareholders' sales reduced to 8 million shares, and the pricing range adjusted to $27-$28 per share. Calculated at the high end, this transaction could raise up to $896 million, valuing the company at nearly $6.2 billion, and with potential dilution factors like employee stock plans, restricted stock units (RSUs), and warrants, the fully diluted valuation would be around $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 numerous renowned venture capital firms, including Accel, Breyer Capital, General Catalyst, IDG Capital, and Oak Investment Partners, with these institutions selling between 8%-10% of their holdings. According to PANews' investment timeline statistics, these institutions' investments can be traced back to as early as 2013, spanning over 11 years.
Compared to the unsuccessful SPAC transaction in 2022 (with a valuation of $9 billion), this IPO returns with a slightly lower valuation but a more robust structure and more positive market feedback.
According to Bloomberg's sources, Circle's IPO subscription orders have already exceeded the available shares multiple times. For instance, tech investment firm ARK Investment Management (founded by Cathie Wood) has expressed interest in subscribing up to $150 million of Circle stocks; simultaneously, global asset management giant BlackRock plans to purchase about 10% of the IPO shares, estimated at $86.4 million to $89.6 million based on the pricing range.
Pricing Strategy May Reserve Growth Potential, Coexistence of Growth and Concerns
At a critical point of stablecoin track accelerating compliance evolution and crypto industry moving towards mainstream, Circle's IPO prospectus submission is not just a capital market sprint but a "arbitrage" of the US regulatory cycle. Once successfully listed, Circle will become the first stablecoin issuing enterprise to enter the US stock market, with symbolic significance comparable to Coinbase's listing.
With strong profitability, solid compliance advantages, broad market expansion capabilities, and endorsements from traditional financial giants like BlackRock, Circle has constructed a high-quality asset narrative framework.
On one hand, according to the prospectus, Circle's total revenue in 2024 reached $1.676 billion, a year-on-year growth of about 15.6% from $1.45 billion in 2023. Currently, the stablecoin market is in a high-speed expansion period, but projects with strong profitability and clear financial data are rare, making Circle's revenue growth a scarce label.
Its core product USDC is already the world's second-largest stablecoin, with a current market value exceeding $61.4 billion. Although a significant market share gap with USDT remains, USDC has built a strong cognitive moat in terms of compliance, transparency, and regulatability. Meanwhile, USDC's multi-chain deployment (including Ethereum, Solana, Base, and Avalanche) and continuous expansion into multi-dimensional scenarios like DeFi, payments, and cross-border settlements support its gradual market value recovery.
Notably, Circle and BlackRock have become close allies, even temporarily abandoning issuing their own stablecoin to support USDC. The prospectus reveals that they are strategic partners. In a new Memorandum of Understanding (MOU) signed in March 2025, BlackRock agreed to be Circle's priority stablecoin reserve partner and promised not to issue competitive USD payment stablecoins. They agreed that Circle will entrust at least 90% of its USD custodial reserves (excluding bank deposits) to BlackRock, and BlackRock shall not develop or release its own stablecoin. This four-year agreement not only strengthens USDC's risk resistance from a liquidity management perspective but also brings trust endorsement from traditional financial markets.
On the other hand, Circle's valuation strategy possesses growth potential. Circle's IPO valuation is around $7.2 billion, with an issue price range of $27-$28 per share. Based on its $155 million net profit in 2024, the price-to-earnings ratio is approximately 45.61 to 47.30 times. In the current global tech sector environment with generally high valuations and tightened risk appetite, Circle's valuation is not exaggerated in the crypto industry and can be considered rational and quite attractive. Remember, Coinbase's price-to-earnings ratio was once as high as 300 times at its initial listing.
More critically, Circle is racing the GENIUS Bill window period. Circle's IPO timing is not coincidental but a precise bet on the US regulatory cycle. Coinciding with significant progress in the US stablecoin legislation GENIUS, which aims to establish a clear regulatory framework for USD stablecoins, this means stablecoin issuers will enter a new "licensed" stage. In other words, the GENIUS Bill represents a superimposed dividend of regulatory arbitrage and market re-evaluation for Circle - preemptively completing compliance endorsement before the bill's official implementation and winning recognition from investors and policymakers through Nasdaq listing.
However, despite Circle's impressive revenue growth, its profit structure exhibits obvious fragility. Firstly, Circle's current revenue relies on US Treasury bond yields, which essentially represent a pro-cyclical dividend. If the Federal Reserve enters a rate-cutting cycle, Circle's reserve earning capacity will face systematic decline.
Secondly, Circle's profit margins are being squeezed structurally by multiple cooperative partners. According to the prospectus information, Coinbase, as its core partner, is entitled to up to 50% of the profit sharing from USDC reserve revenues. In 2024, Circle paid Coinbase a profit sharing amount of $900 million, accounting for more than half of its annual revenue. Additionally, Circle's cooperation with Binance has also revealed high incentive costs. In November 2024, Circle paid Binance a one-time prepayment of $60.25 million and promised monthly incentives based on its USDC custody balance over the next two years, on the condition that Binance holds at least $1.5 billion in USDC. While this strategy of relying on top platforms to gain market share can drive market value, it significantly compresses Circle's actual profit margins.
Overall, Circle's IPO application is not only a staged validation of its business model but also reflects its keen insight into the regulatory environment and financial cycles. However, whether Circle can truly fulfill the expectations of being the "first stablecoin stock" depends on how it finds the best path balancing innovation and compliance within an increasingly complex regulatory framework and financial cycle fluctuations, and continuously optimizes its profit structure to steadily promote its global expansion.
