TLDR
- Circle, the USDC issuer, is going public.
- When is this happening? No one knows. We’ve seen reports ranging from any day now to June to sometime in 2025.
- The financials look fine, but some people are calling into question the large treasury of volatile crypto assets.
It’s not every day we hear about a major crypto company deciding to go “mainstream”. And by mainstream, we mean becoming a publicly traded company like Strategy and GameStop.
But that’s exactly what Circle Internet Group, the issuer behind the USDC stablecoin, is planning. Circle recently filed registration paperwork with the US Securities and Exchange Commission (SEC), announcing its intention to go public on the New York Stock Exchange (NYSE). Circle aims to list its Class A common stock under the symbol “CRCL.”
Before you empty your bank account to YOLO on an IPO, know that finer details, like the number of shares and target IPO price, are still under wraps. With some of Circle’s financial details revealed in the filing, there’s plenty for potential investors to digest. Let’s get after it.
What Do Circle’s Financials Reveal?
Circle’s financial performance has seen moments of growth alongside notable downturns. According to its prospectus, the company reported $1.67 billion in revenue for 2024, reflecting a 16% year-over-year increase. On the surface, this looks promising for revenue growth.
However, net income tells a different story. Circle recorded $155.6 million in net income last year, which might sound solid until you realize that’s a nearly 42% decline from 2023. Compare that to its $761.7 million net loss in 2022, and it’s clear the firm’s profitability has been on a rollercoaster ride.
The report sheds more light on where Circle’s money comes from. Over 99% of the company’s revenue in 2024 was tied to its stablecoin reserves, where it earns income by holding assets like yield-bearing Treasury bills (a nearly identical model to Tether).
Circle’s Crypto Stash
Circle doesn’t just rely on dollars. According to the filing, the firm holds $6.2 million in Bitcoin, alongside $5.6 million in Sui and over $3.3 million in Ether.
They’re also betting on other cryptos like Sei, Aptos, and Optimism. The portfolio could indicate Circle’s commitment to diversifying its digital assets, or it could raise eyebrows for those concerned about market volatility.
Circle’s IPO Journey
You’re not alone if you’re getting déjà vu reading about Circle going public. It’s not their first attempt to make a splash on Wall Street. Back in 2021, Circle planned to go public via a Special Purpose Acquisition Company (SPAC) merger. However, things didn’t go as expected, and the SPAC deal was called off by December 2022, citing regulatory hurdles.
Fast forward to January 2024, and Circle took another cautious step toward an IPO with a confidential filing to the SEC. Now, with its official application in place, it seems like the company is ready to take the plunge. The question is, why now?
Some speculate that Circle’s current financial position and the broader regulatory environment play a role. With increasing scrutiny on crypto companies, going public might be Circle’s strategy to build credibility and demonstrate financial transparency.
Dypto Crypto’s two pennies? It’s about money. Investors want to see a return, and the self-proclaimed Crypto President has made it a point to make crypto and tackling crypto issues a priority. No time like the present, right?
What Could This Mean for Users?
Circle’s entry into the stock market could present unique opportunities (and risks) for potential investors, especially in the context of its reliance on USDC and other digital currencies.
The firm has demonstrated its earning potential with $1.67 billion in revenue last year.
Volatility in net income and current market sentiment reflect the challenges they face. Especially right now. While Circle may hold a diverse basket of crypto assets and Treasury Bills, investors should weigh how market fluctuations could impact its bottom line.
For those new to crypto, the IPO presents a chance to invest in a firm that operates at the intersection of traditional financial markets and blockchain innovation. But as always, doing your due diligence is a necessity.
A Move Worth Watching
While Circle’s IPO filing is a step in the right direction for the company, many questions remain unanswered.
Tether has proven time and time again that Treasury Bills backed by Bitcoin and Ether can make a profitable company. Can lightning strike twice? Can the company sustain or even exceed its 2024 revenue achievements? And perhaps most importantly, how will it position itself in an increasingly regulated and competitive landscape?
All eyes are on the company as it prepares to join the NYSE. Circle might be worth watching if you’re an investor intrigued by companies that straddle the line between tech innovation and finance.
