Circle Internet Financial, the issuer of USDC, the second-largest stablecoin by market cap, is said to be trading at a valuation of around $5 to $5.25 billion ahead of its planned initial public offering. This marks a decrease from its valuation of about $9 billion in 2022, when the company attempted to go public through a failed SPAC deal. The company’s privately held stock is currently trading in the secondary market, with early-stage investors and employees selling shares for liquidity reasons or to monetize stock options before the IPO. However, trades are only allowed above a $5 billion valuation.
The failed SPAC deal with Concord Acquisition Corp in 2022 was terminated after the SEC did not grant approval in time, amidst the challenging market conditions during the crypto winter. Despite the discrepancy in valuations between 2022 and the current secondary market trades, investors are advised not to worry as the secondary market is currently depressed with investors selling at any price due to the need for liquidity. The secondary market is where investors buy and sell securities that have already been issued, such as stocks and bonds.
According to a January report by Circle titled “State of the USDC Economy,” the number of USDC wallets holding at least $10 has increased by 59% in the past year to about 2.7 million. Additionally, the number of transactions using USDC had reached 595 million by the end of November 2023. In January of this year, Circle filed to sell shares to the public for the first time and submitted a confidential draft S-1 document to the SEC. However, the number of shares to be offered and the price range for the planned offering have not yet been determined.
As part of its preparations for the planned IPO, Circle intends to make the U.S. its new legal home by shifting from its current domicile in Ireland. This move was reported by Bloomberg in May, indicating the company’s commitment to establishing a strong presence in the U.S. market. With the growth in the number of USDC wallets and transactions, Circle is positioning itself for success in the stablecoin market as it moves towards its IPO. Investors should keep an eye on the developments surrounding Circle’s listing as it navigates the volatile crypto market landscape.
