Circle’s IPO Shatters Records with 168% Debut Surge, Sparks Crypto-Native Backlash

Wall Street Cheers as Arca Slams Circle’s TradFi Pivot

Circle, the firm behind the USDC stablecoin, made a stunning debut on the New York Stock Exchange on June 5 under the ticker CRCL, closing its first trading day with a 168% gain. The IPO priced at $31 per share—above its expected $27–$28 range—yet opened at $69, and soared to an all-time high of $123.5. At the time of writing, it has been back to the $108 zone.

That explosive trajectory triggered multiple trading halts due to volatility, while its day-one market capitalization ranged from $16.7 billion (NewsBTC estimate) to $18.4 billion (Decrypt), significantly eclipsing its IPO valuation of $6.8 billion and even surpassing its previous 2021 private valuation of $7.7 billion.

Originally set to issue 24 million shares, Circle expanded the offering twice in early June, first to 32 million shares raising $892 million, and finally to 34 million shares to secure the full $1.05 billion. Those shares included both new and secondary stock, leading to a heavily oversubscribed sale reportedly 20 times in demand. With 46 million shares traded throughout the session, demand clearly overwhelmed available float, underscoring intense institutional interest. 

Market watchers immediately compared the debut to previous crypto-linked IPOs: Coinbase, which launched in 2021 with an $85 billion valuation and a 31% first-day gain; Robinhood’s 2021 IPO, which slipped 8% on its debut; eToro’s modest 4% bump in 2023; and Fold’s 30% rise earlier this year on a $224 million valuation. Circle now holds the crown for the strongest IPO debut performance in the sector.

A key driver of this enthusiasm is Circle’s unique positioning. Unlike diversified platforms such as Coinbase, investors view Circle as a direct and “pure-play stablecoin exposure,” offering a more narrowly defined and perhaps cleaner bet on the expanding stablecoin market. 

CEO Jeremy Allaire leaned into this framing, highlighting the need for regulatory clarity and governmental partnerships to integrate USDC into traditional financial systems. “To realize our vision, we needed to forge relationships with governments… it’s got to work in mainstream society and you need to have those rules of the road,” Allaire said, signaling a pivot toward compliance and institutional cooperation.

The institutional appetite matched the narrative. Cathie Wood’s Ark Invest alone snapped up roughly 4.5 million shares worth $373 million—more than double its initial interest of $150 million. Speculation also mounted around a potential 10% stake from BlackRock, estimated at around $624 million, though a finalized figure has not been disclosed. 

The IPO is being heralded in some quarters as a sign of maturation for the crypto industry, blending regulatory alignment with traditional capital markets. GSR’s Carlos Guzman noted that demand reflects optimism about stablecoins ahead of expected U.S. legislation, while Spartan Group’s Casper Johansen emphasized that the liquidity generated from IPOs could catalyze further innovation through recycling into new ventures and M&A activity.

But not everyone is applauding. Circle’s decision to prioritize large institutional investors triggered fierce criticism from longtime crypto-native backers. Leading the charge was Jeff Dorman, CIO of Arca, a firm that had supported Circle in its earlier stages. In a pointed open letter released the same day as the IPO, Dorman accused Circle of sidelining early supporters. 

Arca had requested a $10 million allocation in the IPO but was granted just $135,000—only 1.35% of the request. “You thank us by giving Arca a measly $135K allocation…when everyone else was running from your deal,” Dorman wrote. He went further, condemning the alliance between Circle and Coinbase, calling it “a match made in heaven of two incompetent management teams.”

Arca responded by terminating all Circle-related accounts, rejecting USDC as a payment medium going forward, and advising partners to avoid working with the company. The move sent a strong message about perceived abandonment of the crypto-native community, just as Circle enters a new chapter focused on Wall Street and regulatory alignment. The public feud adds a complex layer to the IPO narrative—one where financial triumph may come at the cost of legacy support and trust within the crypto ecosystem.

While the IPO was a clear financial win—the largest capital raise by a crypto-native firm since Coinbase—concerns remain. Some market observers like Jason Yanowitz of Empire Podcast view the timing as opportunistic rather than sustainable, warning that sentiment toward stablecoins may have already peaked. “Circle hit this IPO perfectly,” he claimed, but saying that he would include Coinbase and Robinhood if he was to create a new equity portfolio from scratch, not Circle.

The path forward for Circle—and others eyeing a public listing—now hinges on managing this delicate balance: appealing to institutional investors while preserving the ethos and support of the crypto-native community that helped build the foundation. As crypto edges further into traditional finance, Circle’s IPO has become more than just a blockbuster debut. It’s a case study in how success can also stir friction, especially when legacy backers feel left behind.

This article has been refined and enhanced by ChatGPT.