Bitwise: What Does Circle's IPO Mean for Crypto Investors?
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Bitwise: What Does Circle's IPO Mean for Crypto Investors?
Multiple parts of the crypto ecosystem will form symbiotic relationships in the long term.
Navigating Web3 tides with focused insightsAuthor: Matt Hougan, Chief Investment Officer at Bitwise
Translation: AIMan@Jinse Finance
The IPO of Circle reminds us why cryptocurrency investors benefit from allocating to both crypto assets and crypto-related equities.
Circle, the issuer of the world's second-largest stablecoin USDC, went public on the New York Stock Exchange last Thursday under the ticker CRCL. It was one of the most successful IPOs in recent years:
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The offering was 25 times oversubscribed, with institutional demand reaching 25 times the volume Circle planned to issue;
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The final price was set at $31 per share, above the initial range of $25–$27;
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On its first trading day, the stock surged 167% on high volume, rising to $105 by Tuesday (when this article was written).
It’s not hard to understand investor enthusiasm for exposure to CRCL. Stablecoins have become crypto’s “second killer app” after Bitcoin. Over the past five years, stablecoin assets under management (AUM) have grown from $4 billion to $250 billion. The U.S. Treasury projects this figure could exceed $2 trillion by 2030—few industries can claim a government forecast predicting 700% growth over five years.
Stablecoin issuers like Circle sit at the heart of this ecosystem: they take U.S. dollars from investors, issue digital tokens representing those dollars (stablecoins), invest the funds in U.S. Treasuries, promise investors the ability to redeem stablecoins for dollars at a 1:1 ratio at any time, and profit from the interest earned on Treasuries (stablecoins themselves do not pay yields to holders).
This is a simple yet high-quality business model. With short-term Treasury yields around 4%, stablecoins currently generate approximately $10 billion in high-margin revenue annually for issuers. If stablecoin AUM reaches $2 trillion, annual revenue could hit $80 billion.
But that’s not what I want to discuss today—even though I believe the business model and economics are compelling.
Instead, I want to make a more important point.
Building a Comprehensive Crypto Investment Portfolio
Beyond Bitcoin, one of the oldest and most fundamental debates in crypto is: where will value accrue? Will it flow to foundational assets like Ethereum and Solana—the decentralized economic infrastructure powering the ecosystem—or to the application layer built atop them, such as revenue-generating products like Uniswap and Polymarket?
Circle is a classic example of an application-layer player: it leverages public blockchain infrastructure while paying minimal fees. In other words, Circle can issue stablecoins on Ethereum for less than a cent in costs, yet instantly access hundreds of millions of users globally—enabling low-cost instant cross-border transfers, access to DeFi applications, programmability via smart contracts, and more.
Just as the internet democratized global content creation thirty years ago—allowing anyone with an internet connection to publish content accessible worldwide in real time—blockchains are now doing the same for finance: they provide financial infrastructure that anyone can build on.
This trend extends beyond Circle and stablecoins. An increasing number of publicly traded companies are leveraging blockchains to build new business models:
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Coinbase generates significant revenue from Base, its Layer-2 network built on Ethereum;
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Galaxy, known for crypto trading, may earn nearly $100 million annually from staking operations;
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Mastercard operates platforms integrated with blockchains like Ethereum and Avalanche, helping enterprises conduct lending and cross-border payments more efficiently.
This means multiple parts of the crypto ecosystem will form long-term symbiotic relationships: core infrastructure increases in value as more applications are built on it, and the application layer creates value as the underlying infrastructure continues to improve.
Of course, we cannot predict whether blockchains themselves or the companies built on top will capture more value—that’s precisely why I believe the optimal strategy is to allocate to both.
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