Circle is undoubtedly the most enthusiastic representative target in the field of cryptocurrency stocks since June, with an increase of more than 500% since its IPO on June 5.
On June 18, CRCLs stock price hit a record high, with a market value of $48.4 billion. According to data from Yahoo Finance, Circles current outstanding shares are approximately 36.34 million shares, accounting for 17.94% of its total share capital (shares outstanding, 202.55 million shares). Based on the closing price of $199.59 on the 18th, the corresponding market value is approximately $7.253 billion.
The rise in Circles stock price also stimulated the rise in Coinbases stock price. This is the first time since COINs IPO that the price and trading volume have risen sharply.
As Circles stock price reached a new high, institutions also began to gradually take profits and sell.
ARK made $96 million, just profit
It is reported that Circle plans to issue 24 million shares and raise $624 million, with a target valuation of $6.7 billion. ARK Invest subscribed $150 million, and BlackRock, led by Larry Fink, invested $60 million. Together, these two institutions accounted for about 35% of this round of fundraising.
On June 5, ARK Invest bought nearly 4.5 million shares of CRCL on Circle’s first day of listing, with a total value of approximately US$373 million based on the closing price.
On June 16, when CRCL price broke through $160 to hit a record high, Ark Invest sold a total of 342,658 shares of Circle Internet Group Inc. through its three exchange-traded open-end index funds. Among them, ARK Innovation ETF (ARKK) reduced its holdings by 196,367 shares, ARK Next Generation Internet ETF (ARKW) reduced its holdings by 92,310 shares, and ARK Fintech Innovation ETF (ARKF) reduced its holdings by 53,981 shares; the total value was approximately US$51.7 million.
On June 17, CRCLs stock price rebounded and once again exceeded $160, and Ark Invests three ETFs sold more than 300,000 shares of CRCL stock, generating $44.76 million in revenue.
Despite selling more than 600,000 shares, Ark Invest still holds nearly 4 million Circle shares, worth about $371 million, or 6.13% of its ETF. That is, at the current share price, ARKs two sales this week were simply selling the current CRCL holdings for profit.
Related reading: The crypto bull market is all about U.S. stocks: Circles rise from $31 to $165 in ten days
Missing out on the opportunity and selling at a loss, can people in the cryptocurrency circle short Circle now?
Circles market value has risen to 40 billion US dollars, and the USDC it issued is only 60 billion. A senior trader sighed on a social platform, revealing the complex mentality of people in the currency circle towards the trend of CRCL. The surge in CRCL since its listing not only reflects the collective sentiment of the crypto market, but also reveals the differences in cognition and game between different trading groups.
People in the industry who are familiar with the operating logic of USDC should have been the first beneficiaries, but in this round of IPO market, there was a rare split - some people bought it with a pinch of the nose, while others understood the logic but thought the valuation was too expensive, and ultimately missed the rise. More traditional stock investors rushed directly into CRCL due to information barriers and narrative differences, and bullish sentiment pushed the price to soar.
Not daring to go all-in on CRCL may be a regret for a long time, wrote crypto trader yuyue. Before USDTs orthodox IPO on the US stock market (almost impossible) or USD1 surpasses USDC and completes its IPO (hopeless in the short term), Circle will firmly occupy the leading position in this narrative.
My winning record in the US stock market was lost to Circle, a cryptocurrency stock! Twitter user Tianli self-deprecatingly said, Since Circle went public, I have been in a state of confusion. The logic of stock trading I used before is no longer applicable. Instead, I have to use the logic of cryptocurrency trading. After playing with it, I cant look at other stocks at all. Its all a mess. Now the US stock market is like a random punch to the old driver for me. For Tianli, Circles fundamentals do not support this round of gains, but the short-term trend cannot be explained by conventional models.
Some traders use the fact that the circulating market value is less than 18% as an explanation for the short-term surge, and compare it to the extremely small market situation of WLD in the beginning. This once again gives the cryptocurrency traders an experience that fundamentals and short-term trends are two different things.
Others choose to bet on the Beta effect. Crypto KOL Taiki wrote before Circle went public: Companies like CRCL are essentially the pricing anchor of stablecoins. If it is worth $10 billion, then the valuations of ENA and MKR will have to be recalculated. Taiki seeks spillover effects by increasing his holdings of DeFi blue-chip assets. Today, CRCL has soared to a market value of $40 billion, while ENA and MKR are clearly not as good as CRCL.
The reason for the other group of people who didn’t make it was even simpler—they knew too much about it. Ms. Lin from Deribit once bluntly advised her family not to touch CRCL. She believed that “Circle’s revenue structure is single and it has long been a red ocean. BlackRock’s BUIDL and Trump’s USD1 will squeeze their share.” Her judgment was not emotional, but came from a deep understanding of the stablecoin ecosystem. But she also admitted that “in the cryptocurrency circle, knowing too much can sometimes become a burden.”
Unlike cryptocurrency traders who repeatedly ponder valuations and fundamentals, US stock investors prefer to listen to stories. As crypto KOL Kay said on X, US stock traders who buy CRCL see the great leader of national strategy, replacing VISA, and rushing to 2000, while the so-called real users of the cryptocurrency circle see the compliance cost is so high that there is no profit, it is easy to lose money in the interest rate cut cycle, the issuance volume relies on a large amount of subsidies, and the reasonable valuation is 30-50.
Jack Zhang, co-founder and CEO of Airwallex, who previously posted on the X platform questioning the actual use of stablecoins and sparked market discussions, posted on the X platform that its time to short Circle.
But now, is it really the time?
The narrative of Circle stock is not prepared for people in the cryptocurrency circle. Chris, a Coinbase x Circle maxi, believes that people in the cryptocurrency circle think that Circle is too expensive because they are self-centered. You thought it was the cryptocurrency circle that revolutionized finance, but the financial industry not only joined the cryptocurrency circle, but also revolutionized the cryptocurrency circle.
Some people also see Circles listing as a potential bull market top signal, similar to the day when Coinbase went public in 2021, which happened to be the high point of Bitcoins last bull market. But some people have raised objections: This round of bubble is far less than that in 2021. Altcoins have been severely washed out, and BTC.D is still at a high level.
More importantly, CRCL is a traditional IPO with an internal lock-up period of 180 days. The selling pressure is limited in the short term, unlike $COIN, which was directly cashed out by insiders. A large number of hedge funds failed to enter the market on the first day of CRCLs listing and could only chase high in the secondary market. Some short-selling institutions are also bearing extremely high annualized funding rates (over 5%), making it difficult to form substantial pressure.
As Arthur Hayes said: Should you short Circle? Absolutely not. You can choose not to buy, but dont short. The sentiment premium is the most terrifying acceleration of volume.
Perhaps, Circle’s market value is not worth believing right now. But what it represents - a stablecoin platform jointly supported by BlackRock, Fidelity, Visa, Coinbase, etc., has crossed the compliance red line and entered the mainstream US stock market. Its valuation does not come from the consensus of the cryptocurrency circle, but from the stock market’s repricing of “fintech compliance platform”.
Hayes believes Circle is severely overvalued, but the price will continue to rise because the listing marks the beginning, not the end, of this round of stablecoin mania.
Related reading: Arthur Hayes: Stablecoin IPO is a dead end, but I advise you not to short it
At a time when traditional payment giants have not yet entered the market on a large scale, USDT is unlikely to IPO, and USD1 is still in the policy observation period, Circle may be the only carrier of this wave of narrative. There is no real future because the distribution channels for new entrants are closed. Put this idea into your stupid head and trade this shit like a hot potato. But dont short it, these new stocks will make short sellers lose all their money.
