“The first stablecoin” Circle (CRCL.US) quadrupled in 3 days after listing! Set a new record for US stocks since 2020

The Zhitong Finance App learned that after going public with a strong capital flow last Thursday, the stock price of the world-renowned stablecoin issuer Circle (CRCL.US), which has the title of “the first stablecoin share”, has quadrupled in just three days since the IPO. The post-market pricing of US stocks on Monday shows that the stock still has room for further growth.

The company's IPO price was $31, which doubled on the first day, then rose another 30% on Friday to close at $107.70. The stock price once surged more than 27% this Monday, surpassing 135 US dollars/share, quadrupling the IPO price. Investors continue to bet on new forms of currency, payment and transfer methods, and the future of the financial system. Major Wall Street commercial banks are exploring the possibility of jointly issuing stablecoins, and they are also continuing to push up Circle's stock price to a certain extent.

By the close of the US stock market on Monday, Circle's stock price closed at 115.25, and soared to an intraday high of $138.570. According to the closing price estimate, the cumulative increase in the company's stock price in the three days since the IPO was as high as 270% compared to the IPO price, and more than quadrupled according to the highest intraday price estimate. According to US stock IPO statistics, among major US stock IPOs that have raised more than 1 billion US dollars since 2020, Circle clearly topped the list with a cumulative three-day increase of +270%, and deservedly ranked first in the three-day cumulative stock price performance of major US IPOs in the past five years.

What are stablecoins? Compared to cryptocurrencies such as Bitcoin (BTC-USD), which fluctuate extremely rapidly, stablecoins can complete transactions very quickly within a “stable” price range. Not all stablecoins are “created equal” (remember the Terra stablecoin crash?) USDC (USDC-USD) launched by Circle fully anchors the US dollar. We can think of it as a “casino chip” in the crypto world or “digital cash” existing in the blockchain system.

These “cryptocurrencies” issued by stablecoin issuers such as Circle maintain an equal amount of dollar reserves to support their anchoring (i.e. fiat collateral). Circle also earns interest by investing most of its reserves in less volatile and short-term liquid short-term US Treasury bonds. Currently, its short-term US debt holdings have reached tens of billions of dollars.

As far as overall usage is concerned, according to the latest estimates of Ark Invest, an investment agency founded by “Sister Mu” Wood, stablecoin transactions even surpassed Visa (V.US) and Mastercard (MA.US) in 2024, although these data may also reflect repetitive wallet transfers, robot transactions, or other short-term arbitrage activities.

As another channel for global mainstream financial assets to enter the crypto investment sector, Circle is the first major IPO in the cryptocurrency industry since the cryptocurrency exchange Coinbase (COIN.US) in 2021. USDC stablecoins issued by Circle can be transferred at an internet-level speed. The transaction cost is only a fraction of a cent, and settlement is almost instantaneous.

Additionally, Circle is actively embracing regulation in all countries where it operates, such as the GENIUS Act accelerated by the US Congress and the implementation of the Stablecoin Regulations in Hong Kong, China. This has made many investors more confident about the investment efficiency of the stablecoin market. Stablecoins have now become a popular way for companies to pay salaries to employees around the world or conduct accurate peer-to-peer transactions.

Stablecoins are essentially “on-chain dollars,” using highly liquid dollar assets (cash, short-term US bonds) 1:1 as underlying collateral. Stablecoins combine “dollar” and “blockchain” to provide a new type of payment carrier that is both stable and efficient, and also allows the capital market to see the commercial potential of “digital dollarization.” Needless to say, high interest rates and interest rate hike cycles allow these reserves to earn considerable interest, bringing stablecoin issuers (such as Circle and Tether) close to bank-level profits, while also providing “qualifying” returns.

Regulations such as the US “GENIUS Act”, the European Union's MiCA, and Hong Kong's “Stablecoin Regulations” are being or have been implemented, and major Wall Street banks are also planning to jointly issue stablecoins; in addition, Circle is the first major cryptocurrency company IPO after Coinbase in 2021. Scarcity and policy dividends have detonated capital, forming a joint hype about the “stablecoin concept.”

Over the past period, stablecoins were mainly used as a channel for traders to transfer funds to and from other cryptocurrencies. However, now more and more cryptocurrency investors are optimistic that as Trump, who strongly supports the development of cryptocurrencies, returns to the White House, stablecoins may soon play a more important role in global commerce and trading systems, especially as a stable payment tool for cross-border payments.