Will Circle’s IPO Be a Top Signal Like Coinbase Going Public in 2021?

Circle’s IPO just went live on the NYSE today, June 5. Given that crypto firms going public is still a fairly new phenomenon, it’s worth looking back at the pioneer — Coinbase’s debut of COIN on April 14, 2021.

Circle, whose USDC stablecoin boasts a market capitalization of $61.5 billion, trades under the ticker CRCL and debuted at $31 per share.

Coinbase went public in a direct listing — with its shares listed on the Nasdaq — at the very top of a bull run, with Bitcoin reaching over $62,000 for the first time on April 15, 2021.

Shortly thereafter the entire crypto market tanked, and BTC plunged below $30,000 in late July 2021. Yes, markets recovered and BTC even broke a new all-time high above $65,000 before that year ended, but then early 2022 marked the beginning of a multi-year bear market for crypto across the board.

Which leads to the question, where are we in the current market cycle, and how does it compare to where we were in 2021? For one thing, the overall crypto market landscape is in a very different place. Bitcoin may have just broken new all-time highs, but altcoins are suffering.

“Coinbase’s IPO [sic] in April of 2021 was euphoric, everything was flying,” said Trevor Koverko, co-founder of web3 AI training firm Sapien, in comments to The Defiant:

Coinbase’s COIN listing was a huge success by any standards. Priced at $250, shares surged as high as $429 before falling back to $328 at the closing bell.

Coinbase also stood alone: one of crypto’s oldest and most successful firms, it was the first crypto-native company to go public, marking a milestone for the industry.

Today, Circle is in good company. Galaxy Digital went public and began trading on the Nasdaq last month. A number of other high profile companies, including Kraken and Ripple, have said they are considering IPOs, although timing remains unclear.

Testing Institutional Appetite

Circle’s IPO will be a test of whether real institutional capital is attracted to stablecoins and crypto infrastructure in a more disciplined market cycle, he added.

“The Circle IPO is less likely to be the ‘top signal’ that Coinbase was in 2021,” Dr. Kirill Kretov, senior automation expert at crypto exchange trading terminal CoinPanel, said in an email. “Instead, it’s more like a test of institutional appetite for crypto infrastructure.”

A strong IPO that is oversubscribed — and Circle’s is rumored to be very oversubscribed — is priced above the range (as Circle’s IPO is), and has a strong first-day trading debut (which remains to be seen) would “validate that institutional investors still want exposure to crypto, but in a more regulated and compliant wrapper,” Kretov said, adding:

On the other hand, a weak IPO would reflect caution by big investors, he said. If a strong stablecoin issuer like Circle can’t attract significant capital it will put pressure on other crypto-related equities, “particularly those without a stable business model,” Kretov added.

A Different Time

“The Circle IPO comes at a very different time than Coinbase’s in 2021,” echoed Sid Powell, co-founder and CEO of institutional on-chain asset manager Maple, in an email to the Defiant.

Powell continued: “Back then, the market was driven by retail speculation and hype across the board. Now we’re seeing a more sober cycle — Bitcoin is leading with strong institutional flows, but most altcoins are down significantly and liquidity is more fragmented.”

Maple’s co-founder noted that a Bitcoin-led market isn’t necessarily a bad thing or bearish for crypto: “It shows the market is filtering noise and refocusing on fundamentals.”

A successful listing for Circle, Powell said, would be a signal of renewed interest by investors in “the role stablecoins will play in disrupting traditional finance.”

Commenting on Circle’s main business, he added, “stablecoins have quietly become core market infrastructure, and Circle’s revenue model, regulatory posture, and scale make it a bellwether for the sector.”

Paul Howard, senior director at crypto market making firm Wincent told The Defiant that he foresees a strong IPO for Circle, predicting that it will mark a temporary high point in the 2025 crypto market cycle.

“The market is in a more mature state and we can expect to see real-world use cases for digital ledger technology, stablecoins and institutional grade assets continue to leave lesser alt coins and others in their wake,” Howard said.

Meanwhile, in the U.S., Congress is under pressure to pass finally provide real regulatory clarity for crypto firms, both in the form of a stablecoin-specific bill, as well as a broader market structure bill, which was discussed in a hearing just yesterday.