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Investors will soon be able to access the Stablecoin issuer to acquire crypto exposure through stocks. Circle will be listed on NYSE at any time.
While institutional demand for the company’s stocks appears robust, retail profits are like wildcards.
The USDC issuer launched an IPO last week, boosting the number of shares it plans to offer on Monday (24 million to 32 million). The Circle also set high price forecasts per share. This ranges from $27 to $28.
In general, underwriters (such as JPMorgan, Citigroup, Goldman Sachs in this case) and their clients are trying to deliver overly, rather than recommending, Architect Partners co-founder Eric Risley told me.
“It also increases the number of shares that are expected to be sold and the price range that are expected to be a clear signal of strong demand,” he said.
That said, the approximately $7.2 billion valuation circle targets below the $7.7 billion valuation obtained in the April 2022 funding round.
Risley explained that changes to IPO terminology (such as yesterday) are usually only made after a full assessment of demand. His point: The list of CRCL shares is imminent.
Some of the strong institutional demand comes from Ark Invest. In its application Monday, the Circle said it was interested in purchasing Circle’s Class A common stock, up to $150 million at updated IPO prices.
Lorenzo Valente, director of digital asset research at ARK, noted that in February Stablecoins’ $220 million supply reached around 1% of US M2 money supply.
According to data from RWA.xyz, Stablecoins currently has a market capitalization of around $235 billion. Ark’s research suggests that it could reach $1.4 trillion by 2030.
“They calm down more transaction volumes across all blockchains than Bitcoin and Ethereum, highlighting the growing advantage as the basis for on-chain activity,” Valente writes of Stablecoins.
The financial world has awakened to Stablecoins’ utility as a payment tool for the Fiat Page (Casey has a lot about it when scrolling).
read more: Stablecon’s digestion: Enforcers’ bullishness on the impending financial infrastructure revolution
BlackRock’s Robbie Mitchnick said in March that he viewed tokenized money market funds as better cash savings vehicles, but that Stubcoin “maintains control” as a means of payment and trading.
Institutional and retail demand
BlackRock reports that it is planning to purchase a Circle IPO. IPO sharing reports that it strengthens Circle’s reputation as “the most institutionally integrated company in Crypto.”
“In a sector that is still defined by volatility and regulatory overhangs, circles position themselves as “boring is beautiful” trade. It is profitable, minimally grown and connected to Web3’s core financial infrastructure,” he said.
For agencies seeking crypto exposure without balance sheet risk, the company is similar to high-yield, regulated stubcoin utility, Sigel added. After all, Circle’s core revenue comes from interest in USDC reserves. It said this involves programmership and 7-day settlement 24 hours a day, like a money market fund.
“Retailers may find it difficult to latch,” added Vanek executive. “The circle doesn’t have the same volatility, beta, meme potential or brand recognition as Coinbase.”
Speaking of Coinbase, Coin Shares began trading directly via lists on Nasdaq in April 2021. The stock opened at $381 and peaked at around $430. The stock is currently hovering for around $260.
Coin has earned an approximately 4% allocation in Vaneck’s new Onchain Economy ETF (Node), a fund managed by Sigel.
