Circle’s IPO: Can the Stablecoin Giant Survive Public Scrutiny

Circle Internet Group (CRCL), which you probably know as USDC’s alma mater, became the first stablecoin issuer to complete its IPO (Initial Public offering) on June 5, 2025.

FYI, Circle’s USDC is the second-largest stablecoin by market cap, and probably, the first regulated one. Curious how Circle’s financial IPO performed at the NYSE?

Circle’s IPO valuation tripled on its debut, reaching from a $31 IPO price to a peak $103.75!

The IPO closed at $83.23. USDC Circle’s IPO became an instant hit, reiterating institutional confidence in stablecoins and other similar blockchain offerings. Circle’s IPO date and the US’s GENIUS Act within a few weeks of each other further bolstered its prospects.

However, skeptics claim the 250% pop in Circle’s IPO valuation is not favourable to retail investors. While we won’t get into the investment advice, it’d be interesting to explore Circle company’s IPO plans in 2025, the motives behind the IPO, and its growth trajectory so far.

Circle’s Evolution Through The Years

Circle began as a peer-to-peer Bitcoin payment startup led by Jeremy Allaire and Sean Neville in 2013. Its purpose was one–to make cryptocurrencies accessible for all. A chronology of events:

Circle Pay

→ In 2013, Circle Pay was launched as a Bitcoin wallet and a P2P payment app.

→ Circle Pay allowed sending and receiving Bitcoin globally, but later shifted focus to fiat transfers.

→ It became the first crypto firm to obtain regulatory approvals and licenses, including New York BitLicense and e-money License from the UK.

→ Circle Pay was shut down in 2019.

Poloniex Acquisition

→ Circle acquired the leading crypto exchange of that time, Poloniex, to bring compliance to crypto and tokenised securities trading.

→ It introduced strict KYC/AML norms and a better user experience

→ Despite turning Poloniex into an almost regulated trading platform, Circle decided to divest the exchange and shift back its focus to core infrastructure services in 2018.

Coinbase and The Birth of USDC

→ Circle partnered with Coinbase to form the Centre Consortium in 2018.

→ Centre Consortium became the governing body that would oversee the launch of USD Coin or USDC, Circle’s stablecoin.

→ Circle released USDC in September 2018 as a fiat-backed stablecoin on Ethereum

→ USDC was quick to earn the trust of institutional and retail investors, and gained adoption in DeFi, CEXs, and as a payment mode.

→ USDC expanded to other chains like Solana, Avalanche, and Polygon.

→ Coinbase exited the consortium in August 2023. Conbase now had full control over the governance of USDC.

MiCA and Circle’s Euro Coin

→ With MiCA (Markets in Crypto Assets) regulation coming into effect, Circle decided to enter the European markets with Euro Coin (EURC) in 2024.

→EURC became the first MiCA-licensed, euro-backed stablecoin on Ethereum. It later expanded to other chains like Solana and Base.

What’s Behind the IPO?

Several factors and externalities come into focus when we try to discover the reasons behind the financial IPO:

1. Macroeconomic Factors

Though stablecoins are fully-backed and pegged to the US Dollar, they remain in the gray zone in terms of regulations. There’s also uncertainty regarding classification of stablecoins as a security, money market fund, or payment instrument. Circle’s IPO is an attempt at legitimisation of stablecoins, especially USDC, as a mode of exchange, especially in cross-border transactions and cross-institutional value exchange.

2025 has seen clarity in terms of the House's Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Senate's Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act swiftly advancing and awaiting final approval. Going public was a righteous course of action for Circle in the IPO-deprived markets.

2. Circle’s Performance Over The Years

Performance-wise, Circle has registered substantial growth. However, the growth looks stunted as Circle’s net income has been declining on a year-on-year basis. The IPO, along with the favourable regulations, could be an attempt to bring a fresh lease of growth to the stablecoin giant.

Circle’s core product remains USDC, the second-largest stablecoin after USDC. It earns its revenue from interest earned on short-term US Treasuries and cash that backs USDC.

A quick overview of Circle’s financials:

💰 Revenue in Q1 2025: $578.6 million

💰 Net income: $64.8

💰Revenue in 2024: $1.68 billion

💰 Net income: ~$156

💰 Revenue in 2023: $1.45 billion

💰 Net income in 2023: ~$268

We can see a marked decline in Circle’s revenue growth over the years. From 2023 to 2024, the gross margin declined by 33%, as is clear from Circle’s financial statements.

Circle’s revenue is heavily dependent on reserve income, which largely comprises interest. This means even an interest rate cut of 25 bps by the Federal Reserve could impact Circle’s revenue by $100 million.

Also, Circle’s distribution and transaction expenses, such as what it pays to Coinbase, is increasing faster than its gross revenue, squeezing its EBITDA over the years. However, Circle’s reserve rate of return has grown over the years from 1.5% in 2022 to 5% in 2024.

Role of Coinbase

Circle has paid $908 million in distribution expenses to Coinbase. This is the single largest expense, comprising 89.9% of the total operation costs of $1.01 billion in 2024. The expenses paid to Coinbase have cut its bottom line by 50%.

Competitive environment

Circle’s USDC is also facing tough competition from its competitors like Tether’s USDT, Paxos’ USDP and PayPal’s PYUSD.

While Tether remains the leading stablecoin, it faces regulatory and transparency issues. Circle, on the other hand, is the compliant peer, though on a smaller scale. USDP is more focused on enterprise-level use cases, and PYUSD is still a newbie on the scene.

That leaves Tether as USDC’s biggest competitor. It tops the charts in operational efficiency and has the highest revenue per employee. It booked $13 billion in profits in 2024, and only $7 billion came from interest on treasuries. Tether has also strategically invested in gold and Bitcoin. However, Tether has time and again failed to be transparent about its reserves, and has decided not to move forward with MiCA compliance. It is probably coming up with a new stablecoin for the US market.

Circle’s operating profits remain comparatively lower. Its revenue model is dependent on how the crypto market performs, and what is baked in the Fed circles

Circle also needs to diversify its revenue streams. The biggest factor that’s working in Circle’s favour is that Circle is bang on compliance and transparent proof of reserves, making it the top contender for institutional adoption. It also has multi-chain support on Solana, Base, Avalanche, XRPL, and Sonic.

Circle’s IPO performance So Far

Let’s juggle up some interesting facts on Circle’s financial IPO for a quick overview :

• A total of $34 million shares were on offer, priced at $31 each. Its equity float was 18.2% of total shares.
• These shares were underwritten by JP Morgan, Goldman Sachs, and Citigroup.
• The IPO was oversubscribed by 25x.
• Circle IPO funding helped raise $1.1 billion.
• The first day trading opened with each share priced at $69, peaked at $103.75, and finally closed at $83.23 per share.
• The 250% jump in share prices pushed Circle’s valuation of $23 billion on the first of the IPO.
• The price-to-sales ratio went over 13x and the price-to-earning ratio (P/E) over 140x.For comparison, the fintech sector has an average of 3-7x for price-to-sales ratio and 20-40x for P/E.
• As per Fortune, Circle delivered the biggest pop since 1980.
• Post the IPO closure, Circle Shares jumped further to $107.5.

While some experts claim that Circle’s IPO was undervalued, others feel the opposite. Shaun Tully, in a Fortune article, states, “At a market cap of $22 billion, Circle is selling at 140 times earnings. Given that treacherous valuation and the onslaught of stablecoin rivals invading its space, Circle is the epitome of an ultrahigh-risk stock.”

A report published by Waterloo Blockchain says that Circle’s extreme IPO surge has a clear disconnect from the fundamentals, and resembles the initial pop Coinbase faced during the initial days of its IPO. The inflated IPO numbers might see decline in the coming days. Investors should wait for the lockup period to end before investing in Circle’s shares.

An X user compares Circle IPO to Facebook’s: “Facebook shares hit new lows in 2012 when its lockup period ended, allowing insiders to sell up to 800 million shares on the open markets (in fact, shares even hit all-time lows). Simply CTRL + F for "lock-up agreements" in any S-1 filing to get more info on lockups. In the circle's case, it's 180 days. Nfa.”

On the bright side, the IPO may be the ‘Turbo Start’ Circle needs before it can get started on its growth plans. Experts in favour of the IPO being undervalued state other factors such as almost non-existent tech IPOs recently, the crypto craze taking over the larger world, greater stablecoin adoption, and institutional interest.

Growth Potential: What’s The Future Outlook For The Stablecoin Giant

Circle’s IPO has seen explosive success. While there are mixed reviews on it, there’s no denying the fact that over the years, Circle has improved its circulation and on-chain transaction volume by 78% year-on-year. Its monthly transaction volume has reached $1 trillion, and all time on-chain activity topped at $18 trillion.

The interesting bit–it can migrate bridged tokens to full native issuance using CCTP V2, providing even greater interoperability and liquidity across digital wallets, tokenized funds, and Web3 protocols. Other tech innovations like Paymaster for gasless transactions will further amplify Circle’s tech superiority over its competitors.

As DeFi adoption picks up speed, its strategic deals with World Chain, Visa, and ICE for its tokenised funds and other trading infrastructures will be a huge boost for its role in the tokenisation of real-world assets. Its Circle Mint (USYC), a tokenised money market fund, is enabling institutions to use stablecoins seamlessly across blockchain settlement layers. Both USDC and USYC provide full-stack infrastructure for tokenising assets and democratising access to payroll, remittances, and payments.

The main catch, however, is how little Circle wants to depend on interest income and diversify its use cases beyond just treasuries. Also, how will it sort the trade-off between compliance, transparency, and the financial freedom crypto promises.

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