Interview with Dragonfly Partner: Circle's IPO Redefines Valuation Expectations for Crypto Companies
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Interview with Dragonfly Partner: Circle's IPO Redefines Valuation Expectations for Crypto Companies
Why Coinbase Might Be the Biggest Winner Behind USDC?
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Speakers:
Haseeb Qureshi, Managing Partner at Dragonfly
Robert Leshner, Co-founder & CEO of Superstate
Tarun Chitra, Managing Partner at Robot Ventures
Laura Shin, Founder & CEO of Unchained
Source: Unchained
Original Title: Did TradFi Just Hijack Crypto? The Suit-ification of Stablecoins – The Chopping Block
Release Date: June 13, 2025
Key Takeaways
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Circle’s IPO shakes Wall Street — A rare two-day surge in IPO history: Was this a banker pricing error, or is crypto disrupting traditional finance (TradFi)?
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Stablecoin boom or meme stock mania? — Circle is valued at 160x earnings and 15x revenue. Tarun compares it to “CoreWeave of finance” (a high-performance computing infrastructure company).
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Tether may exit the U.S. market — With new regulations looming, will Circle dominate domestically while Tether shifts focus overseas?
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Coinbase’s cut — Why Coinbase might be the biggest winner behind USDC, revealing hidden profit dynamics in stablecoins.
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Banks’ consortium challenge — Reports suggest JPMorgan and Wells Fargo are planning their own stablecoin. Is Circle racing against these TradFi giants?
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Rise of tokenized Treasuries — From MicroStrategy to Solana-based derivatives: Could “crypto treasury companies” become the new ETFs?
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Imitators or pioneers? — Why many try to replicate Michael Saylor’s success, yet most are unlikely to sustain it?
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Are these companies just meme stocks? — Laura and Tarun debate: Do trading-focused crypto firms have real value, or are they riding on market sentiment?
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The return of ICOs — Plasma raised $500 million on Sonar, sparking a new wave of speculative token presales.
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Financial innovation or regulatory theater? — Haseeb asks: Are we maturing markets, or simply dressing up TradFi in crypto clothing?
Circle’s IPO: A Historic Milestone
Haseeb:
The stablecoin frenzy has officially begun. We’ve just witnessed Circle’s IPO—one of the most remarkable public listings this year, truly astonishing. For those unfamiliar, Circle has long pursued going public. They initially attempted an SPAC listing during the SPAC boom but failed. Earlier this year, another IPO attempt stalled due to tariff issues. They pushed forward again and finally succeeded. Rumors even circulated that they might get acquired instead—but none materialized.
Circle’s IPO performance was stunning. It became one of the best first-day performers in history and marked the highest two-day gain since 1980 among all IPOs raising over $500 million. Shares surged 180% on day one and another 30% on day two—cumulative gains reaching 250%. Initially raising $1.1 billion, they could have raised $4 billion had they priced at day-two closing levels—a nearly 4x undervaluation.
Circle’s valuation multiples are also extraordinary. At 15x 2024 revenue and 160x earnings, it dwarfs Coinbase’s 25x P/E ratio. This reflects immense market expectations. Of course, insiders remain locked up for the standard 180-day period.
This IPO feels like a signal: the stablecoin era has arrived. Most people didn’t see this coming. There were fears of weak demand or even needing to slash prices. Instead, pricing held firm—and then skyrocketed amid overwhelming public appetite.
Market Reaction and Broader Implications
Haseeb:
Robert, what do you make of Circle’s IPO?
Robert:
It was mind-blowing. It showed how much pent-up demand there is for newly listed crypto companies. I don’t think Circle itself expected this level of success—neither did bankers or investors. Even on crypto Twitter, few predicted such a result. The real question is: where did this intense demand come from? When I talk to people, everyone thought it might be volatile, but no one saw this kind of explosion.
I believe this IPO redefined public market expectations for valuing crypto firms. The intensity of demand was beyond imagination. And I expect this to accelerate other crypto companies’ path to IPO—we’re already seeing new filings.
Haseeb:
Do you think this IPO excitement reflects broader market interest, or is it confined to stablecoins?
Robert:
I think both. Everyone wants in on stablecoins. People know the GENIUS Act and STABLE Act are advancing—stablecoin legislation is coming. It’s a fast-growing market, though it's unclear if Circle will be the sole beneficiary. In some ways, regulation might even pressure Circle. But stablecoins are hot, and true crypto-native public companies are extremely rare in the U.S. So this isn’t just about stablecoins—I think it’s just the beginning. Demand for high-quality, scarce assets will far exceed expectations. After all, there’s never been a pure-play stablecoin investment before.
Is Circle overvalued? Possibly. Compared to Tether, yes. But the issue is there’s currently no other way to directly bet on stablecoins. Investing in Ethereum or Solana doesn’t capture stablecoin success well. So for public market investors, Circle is the most direct option.
Haseeb:
According to Jon Ma of Artemis, if Tether traded at Circle’s valuation multiple, its market cap would reach ~$500 billion. For comparison, JPMorgan sits around $700 billion. That would make Tether the second-largest financial company globally.
Robert:
In a way, Tether arguably deserves a higher multiple than Circle. Circle’s margins aren’t great—they have a large team and must share significant revenue with Coinbase. Tether, by contrast, is far more profitable, so a higher multiple makes sense.
Stablecoin Regulation and Tether’s Response Strategy
Haseeb:
Another key development: the GENIUS Act is set for a vote tomorrow. By the time you hear this, results may already be in—but let’s forecast it now.
Predictions suggest 66 votes in favor, 32 opposed. So passage seems likely, though final confirmation is pending. Either way, it signals strong market appetite for this legislation.
Meanwhile, Tether has stated that if the GENIUS Act passes, they may consider exiting the U.S. market. The bill requires stablecoins to be backed by high-quality collateral like short-term Treasuries—the model Circle and most others follow. But Tether’s portfolio includes commercial paper, Bitcoin, and various loans. To comply, they’d need to completely restructure their financial infrastructure to ensure 1:1 backing with safe assets.
Robert:
But will they really do it? Because technically, achieving 1:1 backing should be feasible. They’ve accumulated over $10 billion in profits reinvested into diverse assets. Given their profitability and potential over-collateralization, strict 1:1 support shouldn’t be impossible.
Haseeb:
Perhaps not—but Tether has publicly said they’ll exit. That could be strategic pressure to influence regulators. Still, they’ve emphasized shifting focus to non-U.S. markets. I understand why—restructuring could be extremely costly. Plus, future operations would face tight Fed oversight.
Tether has always been relatively closed and opaque. They seem inclined to preserve their current model, so this reaction isn’t surprising.
Circle’s Market Position and Future Trajectory
Haseeb:
Circle’s business model is essentially a money printer, which may explain its massive premium. Markets realize Circle will likely dominate the U.S., especially as Tether resists incoming regulation.
Haseeb:
This means Circle will compete directly with banks. Reports suggest major banks are discussing forming a consortium. Firms like JPMorgan and Wells Fargo may launch a stablecoin backed by a coalition of large U.S. banks. The industry could split: Circle onshore as a crypto-native tech player, banks serving institutional clients with risk-averse models. Internationally, Tether may retain dominance. On-chain, USDC remains leader due to legacy adoption. Different players may lead in different domains—but it’s early days. Laura, what’s your take on the Circle hype?
Laura:
I agree with Robert—Circle’s popularity stems not just from stablecoins but from being a public company. These crypto reserve firms, especially Bitcoin treasuries, offer traditional investors exposure to crypto. Circle satisfies both demands.
But regarding everything we’re saying about Tether—I recently interviewed Jeff Park in a two-part series, very insightful. Essentially, stablecoins could fragment the dollar into multiple products. If the U.S. embraced this asset more entrepreneurially, given global demand, it could unlock huge value.
Will governments unite to recognize this opportunity? If they adopt an entrepreneurial mindset, they could leverage it. People often say Tether exemplifies dollar demand abroad. Imagine different yields based on issuer or who mints stablecoins. I believe people realize there’s vast room here for multiple niche markets.
Interestingly, two different people I spoke to expressed skepticism about Circle pre-IPO. Circle spends heavily, operates differently from Tether due to compliance. Even some in securities complain that when misconduct occurs, Circle won’t freeze USDC funds—because as a U.S. entity, they’re more vulnerable to lawsuits, unlike Tether.
This is common knowledge in crypto, but I saw a tweet from someone who worked at Circle. She said watching Circle’s IPO pricing from a financial infrastructure perspective was exciting. When you control money issuance, you’re no longer in fintech—you’re in monetary policy.
She cited numbers: PayPal valued at $70B, handles $1.5T in volume; Visa at $500B, $14T volume; Circle valued at $6B, $1.2T volume. Its transaction volume rivals Visa, yet market cap is only ~12–13%. She noted the crypto space underestimates this—but her real point was the 25x oversubscription. Underwriters priced too conservatively, missing a structural shift. Circle controls the printing press of digital dollars.
To be honest, I’m unsure how this plays out—especially considering Circle gives half its profits to Coinbase. Coinbase earns more from USDC than Circle does. There’s a power hierarchy: those with distribution—like exchanges—hold the most power. I understand Circle’s model, but stablecoins will become a massive category.
Tarun:
I attended the IPO party on Friday. First time I’ve seen so many traditional finance folks at a crypto event. Only three of us weren’t wearing suits—it was surreal. They rang the closing bell, packed with people, and we stood at the back.
I’ll say this: I’ve never seen traditional finance show such genuine interest in crypto. Usually it’s performative—“Oh Bitcoin’s up, let’s pretend we work with blockchain.” This wasn’t that. Everyone present was tied to non-bank financial lending—all major private credit fund CEOs were there.
Circle and Tether attract entirely different audiences—different net worth brackets, barely overlapping users except maybe trading USDC on Curve. Over time, they’ll diverge further. Looking at newer stablecoins, I feel Circle paid dearly for early distribution advantages, but no new stablecoin can match Coinbase-level distribution.
I’m not talking about Tether—about all competing stablecoins. They either face this hurdle or pay even more than Circle for distribution. I think Circle set the floor price for any distribution deal, making entry extremely hard for newcomers. Everyone now demands 75–80% of revenue, not 50%. This creates a powerful pricing dynamic, raising barriers. So I think banks are more likely to succeed than startup stablecoins.
Haseeb:
You mentioned Circle’s dominant position—we all agree. What about pricing? That’s what most of us comment on.
Tarun:
You know, there are two ‘C’ meme stocks—CoreWeave and Circle—founded almost simultaneously. I think both are meme stocks, but opposite to GameStop. These memes mean “this should grow massively over 10 years.” The problem? Few proxies exist to bet solely on them. So all bets get concentrated here.
Haseeb:
That’s the real story. Right now, Circle is the only pure-play stablecoin investment available on public markets. If we talk low-float tokens or IPOs, few investors want that narrative. So the narrative gets amplified. When more supply enters, opportunities may broaden—though I believe that will happen.
Tarun:
Circle’s IPO float is much higher than some data center firms. I mean, CoreWeave’s IPO isn’t exactly something I’d show regulators to prove crypto is better than low-float, high-FDV companies. Recently, some AI IPOs looked worse than bad crypto.
Haseeb:
But interestingly, if half of Circle’s revenue goes to Coinbase, then adding Circle’s revenue to Coinbase’s other businesses equals Coinbase’s total market cap—implying Coinbase’s non-stablecoin revenue trades at under 3x multiple.
Clearly not accurate—this reflects Circle’s extremely low float, so limited price discovery despite massive stablecoin demand. Buying Coinbase doesn’t give sufficient stablecoin exposure. Circle is today’s purest stablecoin bet. But here’s the twist: in an efficient market, Circle should reprice once people realize its revenue is far more valuable than assumed.
Tarun:
If you look at CoreWeave versus its customers’ market caps—many are revenue-sharing/build partners—it’s not that different. So you must consider macro factors. I do think the market is tired of pure ETF plays—Microstrategy, Treasuries. The tenth Treasury product launch didn’t perform well. I see Circle as a real product, not the tenth Bitcoin treasury firm. The irony of these treasury companies is they might strangle their golden goose through too much competition chasing the same play.
Crypto Reserve Companies: An Emerging Trend
Haseeb:
Next, let’s discuss crypto reserve companies—a topic we’ve touched on before but still has depth. For context, the original was MicroStrategy (now renamed “Strategic Company”). Once a software firm, it’s now essentially a giant Bitcoin vault. They raise corporate debt to buy more Bitcoin. Puzzlingly, MicroStrategy trades at about 1.7x the value of its Bitcoin holdings (NAV). Why this premium? It’s controversial. Some argue it reflects investor appetite for leverage and future accumulation potential. Buying MicroStrategy stock gives indirect leveraged Bitcoin exposure.
We’re seeing others follow: Jack Mallers’ 21 Capital, Trump Media, Korea’s Nexon, Japan’s Meta Planet. Critics worry this could become the next GBTC (Grayscale Bitcoin Trust), whose complex leverage contributed to 3AC’s collapse and cascading failures via BlockFi. But unlike GBTC, these treasury firms lack obvious leverage mechanisms—debt structures differ fundamentally from hedge fund-style margin trading. Laura, Unchained recently published on compensation structures at these firms—can you summarize?
Laura:
These firms use novel approaches to evaluate and reward executives. Stock price is traditionally a benchmark, but some innovate. For example, Defi Dev Corp holds Solana as reserves. Their CEO, CFO, and CIO compensation ties directly to per-share Solana amounts. Fascinating—because many such firms trade far above their underlying asset value.
Haseeb:
This shows why relying solely on stock price is flawed. These firms’ values correlate tightly with volatile base assets. If Solana surges, executives earn more without doing anything—unfair. Better metrics would assess whether they successfully increase Solana holdings.
Robert:
The incentive drives companies to issue debt to buy more crypto. Say a firm uses 5x leverage—per-share crypto holdings rise sharply, but so does risk. It resembles a leveraged ETF, though too complex to model exactly like traditional ones.
Haseeb:
The key is *how* leverage is used. Some forms are highly risky, others safer.
Robert:
MicroStrategy’s approach seemed dangerous initially, but now appears validated.
Haseeb:
Absolutely. They recently introduced a new debt instrument called “Strikes.” Key feature: no repayment obligation, no recourse. Miss a payment? No need to catch up later. Investors get only a 10% coupon as incentive.
In effect, borrowers tell investors: “Buy my bond, but I may never repay.” Then use proceeds to buy Bitcoin, capturing upside. Meanwhile, investors hold passive debt—no recourse, no upside sharing. Borrowers gain power; investors are passive.
Tarun:
An interesting theory suggests MicroStrategy’s success mirrors Bitcoin’s fork mechanism. During forks, holders receive free coins, often sold to buy more BTC—boosting overall value. Similarly, MicroStrategy’s “forks” could refer to secondary or tertiary Bitcoin treasury firms. If these fail, capital may flow back to MicroStrategy, reinforcing its role as the core hub. Unless Bitcoin crashes severely, MicroStrategy has proven resilient—even if smaller than peak size. Other treasury firms fight for marginal scraps.
As for investors buying junior-tier Bitcoin treasury debt, I struggle to understand their rationale. MicroStrategy is the superior choice. As Robert said, they used aggressive leverage to build a massive treasury, enabling cheaper convertible debt issuance. But the convertible bond market isn’t infinite—not all investors want this trade. Most prefer buying MicroStrategy stock directly; it’s simpler. Debt arbitrage requires expertise and risk tolerance—few are willing.
Structurally, this arbitrage opportunity resembles a fixed “demand pie chart.” MicroStrategy owns at least 50%, possibly more. Others compete for leftovers. Even if the convertible debt market grows 10% annually, it can’t meet all funding needs. I expect some Bitcoin treasury firms to eventually pivot or fail due to financing constraints.
Understanding Convertible Bond Arbitrage in Crypto
Robert:
There’s a key difference between traditional convertible bond arbitrage and crypto treasury firms. For a regular non-crypto firm—say, a Midwest manufacturer issuing convertibles—markets focus on stock volatility and upside above conversion price. Investors use options pricing models. But this market is tiny, essentially betting on single-company volatility. And investors bear both credit risk and complex option strategies.
For MicroStrategy or other crypto reserve firms, it’s different. Downside risk ties primarily to Bitcoin price swings, not operational risks. These firms act like “vaults”—their value depends on Bitcoin. This uniformity removes complex company-specific risks. Investors focus purely on Bitcoin volatility and downside. Compared to traditional convertible markets, this attracts far more capital—crypto’s scale is larger and growing as Bitcoin and other cryptos gain adoption.
Tarun:
What about Solana or Ethereum-based firms? Bitcoin’s market is large enough to support this, but I doubt Solana’s sustainability.
Robert:
It depends on spot and derivatives market depth. If Ethereum’s derivatives market is large, hedging or modeling convertible bonds for ETH-focused firms isn’t hard. But for lower-cap assets—say, rank #400—the market is thin, illiquid, and hedging is extremely difficult.
Tarun:
Every asset has carrying capacity. Bitcoin’s size allows long holding periods, but even with Ethereum, few tolerate extended risk. Funding rates and Ethereum ETF option pricing reflect this.
Robert:
Yet Ethereum and Bitcoin funding rates aren’t that different.
Tarun:
From open interest perspective, weighted results show big differences. I think no more than 10 Ethereum strategy firms will survive.
Haseeb:
Maybe 10 Bitcoin-related firms, 2 for Solana.
Tarun:
Actually, there are far more than 10 Bitcoin-related firms. Many randomly add Bitcoin to reserves.
Potential Market Risks and Dynamic Analysis
Laura:
I noticed a tweet suggesting these companies could play central roles in future collapses, similar to GBTC or meme stocks. We discussed this—feels plausible only if these assets can be used as loan collateral. Other factors matter too: MicroStrategy may get better loan terms, while others stretch further on the risk curve with aggressive strategies, facing bigger downside during volatility.
In short, if lenders accept these assets as collateral, that’s how risks explode. Could trigger cascades: Bitcoin drops for any reason, weaker-financed firms sell assets, worsening market spirals. Just thinking aloud—but seeing so many discuss this is fascinating. Based on what I know, these assets still can’t be pledged as collateral. Though I heard JP Morgan now accepts Bitcoin ETFs as loan collateral—that’s notable. Despite CEO Jamie Dimon’s anti-Bitcoin stance, his firm clearly sees profit potential.
Haseeb:
But borrowing gets complicated, right? Loan-to-value (LTV) ratios would likely be conservative.
Tarun:
Yes, LTV is crucial. Almost every broker offers this, except a few outliers.
ETFs can indeed serve as collateral. In trading, brokers usually offer margin loans. JP Morgan’s approach seems cautious. Sure, I can borrow against MicroStrategy—but LTV won’t be high. Most brokers provide similar services.
Laura:
Oh, got it. So could this explain why some say it might become the next GBTC?
Haseeb:
I think market crashes rarely stem from widely watched phenomena. There’s truth to that. Risk usually hides deeper.
Tarun:
I think failure mechanics resemble this: If a company joins the S&P 500, all linked ETFs must buy its stock. But before rebalancing, if Bitcoin crashes, the company might get delisted due to debt issues. The problem: inclusion typically lifts stock prices, letting firms issue cheap debt. But if crypto assets plunge before the next rebalance, trouble follows.
Haseeb:
Also, these debts usually lack claims on conversion rights—creditors can’t recover losses through bankruptcy proceedings.
Michael Saylor’s Market Influence
Haseeb:
Frankly, I still don’t fully grasp how Michael Saylor pulled it off, but his capital-raising ability is astounding. Collapse won’t start with Saylor—it’ll likely be others. If the market crashes—say Bitcoin hits $50K or $40K and stagnates—Saylor might amplify downward pressure, but he won’t be the spark. His strategy worsens downturns but fuels rallies via cyclical amplification. This double-edged nature means escaping downturns becomes harder.
Robert:
Still, I think the next bull run presents a great opportunity. Definitely good news for Saylor.
Tarun:
I deeply admire Saylor pulling this off. That’s why I’m puzzled by the imitation wave. We must recognize how bold and extreme Saylor’s move was. Not everyone should copy it. Imitation is flattery, but it’s more like “burning money” flattery. You know, mimicking may not be wise.
I don’t think these imitators share Saylor’s Bitcoin vision. Talking to them, they care more about profits than deep macro thinking or obsession with surviving market collapse.
Haseeb:
Completely agree. Saylor is a unique figure—his strategy and influence evoke a mob boss. Someone like him may never appear again.
Tarun:
I think it’s less about never having another Saylor and more about changing game rules ahead.
Haseeb:
Exactly. Those trying to be the “next Saylor” shouldn’t expect equal rewards. Saylor holds massive MicroStrategy stock, enabling higher risk-taking. These “next MicroStrategy” players are more like mercenaries—no long-term alignment. They should optimize Saylor’s invented financial playbook, not blindly copy him. After all, Saylor is fundamentally a “financial engineer”—his returns should reflect that innovation, not just base asset appreciation. I believe markets will evolve this way.
Tarun:
Still, I find it hard to get excited about imitators. Currently, it’s unsustainable. I hope I’m wrong—wish there could be 500 such firms—but it seems unrealistic.
The Rise of ICOs and Market Trends
Haseeb:
There’s a project called Plasma, allegedly a Tether-linked stablecoin chain. Many such projects claim native token issuance with zero on-chain fees. The idea: this beats Tron, which charges fees, while boosting stablecoin payments.
Plasma recently conducted an ICO via Sonar, valued at $500 million. Selling 10% of total supply, they raised $50 million. Funds went into a liquidity vault—demand hit $500 million within seconds. Top 10 wallets held 38% of supply; top 17 held 50%. One wallet alone deposited $50 million. A “gas war” erupted—one user reportedly paid $100,000 in fees to secure a $10 million USDC participation. This signals the return of ICO mania.
Tarun:
Funny how ICO booms seem to coincide with Trump administrations—2017 being a classic case.
About Sonar, Kobe mentioned that when designing Echo, investors disliked traditional syndicate models—lacking access and control. Sonar lets teams run flexible ICOs. Fascinating—like I wrote in my book, early ICO models like DAO raised massive funds but teams lacked tools to manage capital. No safe way for investors to withdraw—led to hacks. Later improvements emerged, like Taylor Monahan’s tools helping victims of phishing/theft. Now, platforms like Sonar represent mature evolution. I see a long-term trajectory. During dot-com bubble, startups went public early; now they delay. Today’s model lets retail invest earlier. Yes, it’s risky—needs investor education, maybe qualified investor rule reform. But historically and structurally, I believe similar ICO-like models will grow more common—even if not identical.
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