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We finally have Circle’s S-1 and, honestly, it’s just as juicy as I had hoped.
It looks like Circle, which plans to list on the New York Stock Exchange under ticker CRCL, is aiming for a valuation of around $4 billion to $5 billion.
Some folks — including PitchBook’s Robert Le — have noted that it’s a rather low valuation. In Le’s case, he thinks it could be purposefully low.
Coinbase, when it went public in 2021, kicked off trading with a nearly $100 billion valuation. Obviously, the two companies, while very intertwined, have different business models, so don’t get too excited about Circle getting anywhere near those levels.
Especially if stablecoin legislation is passed.
But the roadshow will be the real test for the stablecoin issuer, Le told me.
“My guess is, if it all goes well, that valuation should push up much higher toward the end of their roadshow. And then that would be a positive signal,” especially if interest is higher than anticipated.
As Wyatt Lonergan of VanEck Ventures noted, the issuer will face questions around the market evolution and what could possibly be the beginning of “stablecoin wars,” which would see everyone, including big banks, look to issue their own stablecoins.
It’ll “come down to how the market evolves and begins using stablecoins at scale. If that stable is USDC, then they’ll get a strong multiple even as their take rate declines, because the potential markets they can grow into are massive.”
But on the venture capital front, strong demand for the listing could open up a new exit path for crypto investments, and that would be a “shift that might encourage additional capital inflows into crypto startups.”
Circle could — and so far looks to be — just the start of a crypto IPO boom, with others like Kraken, Chainalysis and Fireblocks in the wings. Add in the pick up in M&A activity and the liquidity routes are wide open for a lot of folks.
