A major milestone in the crypto space has finally been reached as Circle, a stablecoin issuer, filed its long-awaited initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), reigniting hopes for crypto listings amidst global economic uncertainty.
A major milestone in the crypto space has finally been reached as Circle, a stablecoin issuer, filed its long-awaited initial public offering (IPO) with the U.S. ‘Securities and Exchange Commission’ (SEC). This move marks a significant step towards becoming a publicly traded company and is being closely watched by investors and analysts alike.
Circle, a digital financial services company, announced its plans to go public in 2023.
The company filed confidentially with the US Securities and Exchange Commission (SEC) under the Jumpstart Our Business Startups (JOBS) Act.
As of now, details about the IPO, including the expected valuation and listing date, remain undisclosed.
Circle provides payment infrastructure solutions for businesses and individuals worldwide.
The company has raised over $1 billion from investors, including Tiger Global Management and General Catalyst.
The news of Circle’s IPO filing has sparked a mix of reactions in the market, ranging from optimism to skepticism. Some see it as a bullish signal, indicating that another major player in the crypto space is inching closer to the public markets. However, others question the timing, given the current state of the market and the company’s financials.
The recent announcement by ‘U.S. President Donald Trump‘ about reciprocal tariffs on approximately 90 U.S. trade partners has sent shockwaves through the global economy, leading to a decline in equities. The S&P 500 and Nasdaq have dipped 11% and 17% year-to-date, respectively, marking one of the worst quarters in recent years.
Circle’s financials, which include shrinking gross margins and high spending, pose a significant risk to its IPO. The company’s distribution partnerships are also being scrutinized as a major expense item.
Circle is a financial technology company that provides payment solutions for individuals and businesses.
The company's financials are primarily focused on transaction processing fees, which are a percentage of the total transaction value.
According to reports, Circle generates revenue through its payment infrastructure, which includes wire transfers, payment cards, and online banking services.
In 2020, Circle's revenue reached $1.14 billion, with a significant increase in transaction volume due to growing demand for digital payments.
“Circle is currently being priced like a traditional crypto business — cyclical, interest rate-dependent, and not diversified enough,” Lorenzo Valente, a crypto analyst at ARK Invest, notes. He suggests that the company needs to evolve into a payments network with high margins and strong moats to justify its valuation.
Despite the challenges ahead, Circle’s rumored valuation of $4 billion to $6 billion is in line with Coinbase and Block. The growth prospects for US-backed stablecoins, driven by commercial use and regulatory changes, are seen as a positive factor.
“The prospect for the growth in US-backed stablecoins based on the growing commercial use, shift in U.S. regulatory and legislative (GENIUS Act) winds, and the U.S. Treasury’s incentive to find new buyers of its growing stack of U.S. T-Bills” is a promising one, Mark Connors, chief investment strategist at Risk Dimensions, believes.
A US-backed stablecoin is a type of cryptocurrency that is pegged to the value of the US dollar.
These coins are designed to maintain a stable price, typically through collateralization with US dollars or other low-risk assets.
They are often used for cross-border transactions and can provide a hedge against market volatility.
According to a report by the Securities and Exchange Commission (SEC), there were over 100 US-backed stablecoins in circulation as of 2022, with a combined market capitalization of over $120 billion.
While Circle’s IPO filing has generated significant attention, several other crypto natives are looking to fulfill their IPO dreams in the coming months. Kraken, Gemini, Blockchain.com, Bullish (the parent company of CoinDesk), and BitGo are among those rumored to be in talks to go public.
However, analysts at crypto M&A advisory firm Architect Partners expect the majority of IPOs to be filed in the second half of 2025 after written regulations and policies are clearly completed.
