Circle IPO Controversy: Encryption Native Institutions Face Cold Reception

Recently, USDC stablecoin issuer Circle completed its initial public offering ( IPO ), pricing each share at $31, higher than the previous expected range of $24 to $26. The closing price on the first day reached $84, and within a week, the stock price broke $107. The pricing of this IPO is considered to be significantly low, reflecting Wall Street's heightened interest in encryption assets, particularly stablecoins.

Circle stock investment analysis

Bullish Reasons:

• The first publicly listed investment target focusing on the growth of stablecoins
• The stablecoin market is expected to surpass $1 trillion in scale.
• USDC currently manages assets of 60 billion dollars, with an annual growth rate of 91%.

Bearish Reasons:

• Income completely depends on interest rates
• Share profits with partners such as Coinbase and BlackRock
• Slow revenue and profit growth over the past three and a half years.
• The current stock price valuation of 107 dollars is on the high side.

IPO placement has sparked controversy

Multiple industry insiders have stated that Circle is leaning towards traditional financial institutions in this IPO, neglecting encryption-native funds and early supporters. Many early users and promoters of USDC received either very little allocation or none at all. This practice is considered shortsighted and goes against the original intention of the encryption industry.

An industry insider pointed out: "Circle can completely control the allocation list and ratio of the IPO. They choose to ignore the demands of encryption funds, either out of negligence or intentionally."

Criticism of Circle's decision

There are views that Circle's move deviates from the spirit of encryption and the principle of "customer first":

• Failed to repay the long-term support of encryption native institutions
• Allocate shares to traditional financial institutions that may not understand the industry.
• Missed the opportunity to enhance customer returns through IPO and promote a virtuous cycle in the industry.

The other side of the controversy

Some people also defend Circle, believing that:

• The IPO was oversubscribed by 25 times, and all investor allocations were compressed.
• The final allocation decision lies with the underwriter rather than Circle
• Critics may simply be dissatisfied due to not receiving enough quotas.

The future impact remains to be observed.

The impact of Circle's IPO allocation on its future development and the adoption of USDC is still unclear. The industry will closely monitor the upcoming 13F filing to understand which investors Circle ultimately chose to share its growth dividends.