Circle, the "First Stock of Stablecoins": The IPO Enigma — A Founding Team’s Missed $5 Billion Exit
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Circle, the "First Stock of Stablecoins": The IPO Enigma — A Founding Team’s Missed $5 Billion Exit
What foresight or concerns drove these insiders—the people who know the company best—to choose an "imperfect" yet perfect exit?
Navigating Web3 tides with focused insightsBy Ji Zhenyu, Tencent News "Qianwang"
In Wall Street’s latest wealth creation saga, the listing of Circle (NYSE: CRCL), issuer of the stablecoin USDC, has been both a “great escape” and a “capital fantasy” unfolding simultaneously.
On one side of the story, the company's founders, executives, and early investors collectively cashed out nearly $600 million during the IPO—missing out on an additional $4.2 billion in unrealized gains as the stock price later surged.
On the other side, Wall Street has shown unprecedented enthusiasm for this so-called “disruptor of the crypto world.” The stock soared from its $31 IPO price to nearly $300 within less than a month—an almost tenfold increase—making it one of the most spectacular IPOs of the year. Meanwhile, numerous analysts have confidently issued “buy” ratings, projecting that Circle will dominate a future market potentially worth trillions of dollars.
This stark contrast between internal caution and external euphoria prompts deep reflection: What foresight or concern drove these insiders—who know the company best—to execute what appears to be a “perfect exit” at such an “imperfect” moment? And what grand vision do public market investors see in Circle’s future?
A long-time fintech-focused analyst told Tencent News that although insiders and early investors sold heavily during the IPO, such actions are standard practice. He remains firmly bullish on the long-term development of stablecoins, noting that whether viewed through regulatory evolution or industry ecosystem growth, the stablecoin sector is still in its infancy.
From Vision to Foundation: Circle’s Decade-Long Evolution
To understand Circle’s strategic decisions, one must first grasp its DNA. Founded in 2013 by Jeremy Allaire and Sean Neville, the company's original ambition went far beyond creating another digital currency. Their vision, laid out in the "Founder's Letter" of the IPO prospectus, was to “build a new global economic system”—an internet-based framework where value could flow freely and frictionlessly like information.
The journey hasn’t been smooth. After experimenting with a peer-to-peer payment app similar to Venmo called Circle Pay and briefly entering the cryptocurrency exchange business, the company eventually underwent strategic contraction and transformation. The real turning point came in 2018 when Circle partnered with crypto giant Coinbase to launch the Centre Consortium and introduce its flagship product—the U.S. dollar-pegged stablecoin USDC.
USDC struck precisely at the pain points of the crypto world: it offered a regulated, transparently backed, 1:1 USD-pegged value anchor. From day one, Circle adopted a “regulation-first” strategy, proactively securing New York State’s first BitLicense and obtaining compliance approvals across multiple major financial centers globally. This relentless focus on compliance allowed USDC to stand out in a chaotic stablecoin landscape, earning trust from institutional players and mainstream finance. As emphasized in its prospectus, Circle is committed to “walking through the front door to meet regulators and policymakers.”
Today, USDC ranks as the world’s second-largest stablecoin, with over $60 billion in circulation, natively operating across 20 blockchains—forming the cornerstone of Circle’s expansive commercial empire.
Deconstructing Circle’s Business Model: More Than Just a Stablecoin
While Circle’s USDC stablecoin is its most recognized offering, its business model is significantly more complex and far-reaching than mere stablecoin issuance.
In essence, it is a multi-layered, networked financial services platform built around USDC as its core—a strategic structure best understood as “one body, two wings”:
One Body (Core Business): Interest income from USDC reserve assets. This remains the company’s primary and most mature profit engine. According to Circle’s IPO filings, reserve income accounted for over 95% of total revenue between 2022 and 2024. The mechanism works as follows: when institutional clients mint USDC, they must deposit an equivalent amount in U.S. dollars. These funds form a massive USDC reserve pool, which Circle invests into highly liquid, low-risk assets—primarily the “Circle Reserve Fund,” a government money market fund managed by asset management giant BlackRock, along with cash deposits held at globally systemically important banks. Circle earns interest and dividends from these reserve assets, constituting its core revenue stream—Reserve Income.
Two Wings (Growth Businesses): Platform fees based on transactions and services, and emerging asset management models. These represent two key directions Circle is pursuing to diversify revenue and build long-term moats.
Platform and Developer Services: Circle aims to become the “Stripe of Web3,” providing powerful APIs and tools for developers to build applications, charging service fees in return. Its offerings include the Cross-Chain Transfer Protocol (CCTP), which enables native transfers of USDC across different blockchains and charges per transaction; as well as programmable wallets, gas fee solutions, and smart contract platforms—all designed to streamline development while creating monetization opportunities.
Asset Management and Tokenized Funds: This marks Circle’s push into traditional finance, centered on USYC, an interest-bearing tokenized money market fund. Acquired through the purchase of Hashnote, this business offers traders in the digital asset markets a tool that generates yield while serving as efficient collateral. As fund manager, Circle collects management and performance fees—opening up a brand-new revenue stream in asset management.
The Truth Behind the IPO: A Spectacle Designed for “Exit”
Yet despite its bright prospects, Circle’s IPO structure sent strong signals of an “exit” event. According to the S-1/A filing submitted to the U.S. Securities and Exchange Commission, of the 32 million shares offered, a staggering 19.2 million (60%) were designated as “selling shareholder” shares—meaning they were sold by existing shareholders rather than the company itself. As a result, nearly $600 million of the over $1 billion raised went directly into the pockets of early investors and executives.
The list of sellers reads like a who’s who of Silicon Valley: founder Jeremy Allaire (sold 1.58 million shares), co-founder P. Sean Neville (sold 1 million shares), and top-tier VCs including General Catalyst and Breyer Capital.
At the final IPO price of $31 per share, these insiders collectively realized $595 million. But when the stock climbed toward $300, the potential gain they left behind approached $5 billion.
Wall Street’s Frenzy: Why Is the Market So Bullish on Circle?
In sharp contrast to insider selling, public market sentiment has been wildly optimistic. Following its listing, Circle’s stock skyrocketed, quickly pushing its market cap past $50 billion.
This enthusiasm isn't baseless. Investors and analysts see unique value and vast growth potential in Circle:
An analyst at Seaport Research hailed Circle as a “top-tier crypto disruptor,” issuing a “buy” rating with a $235 price target. His logic is straightforward: regardless of which cryptocurrency or blockchain application ultimately prevails, all will require a stable, reliable medium of exchange—and USDC is positioned as the “digital dollar of the internet.” Unlike crypto exchanges, Circle doesn’t sell volatile digital assets; instead, it provides the foundational infrastructure upon which the entire crypto economy runs—a model seen as fundamentally more resilient.
Other analysts predict the stablecoin market could grow tenfold in the next five years—from today’s ~$260 billion to over $2 trillion. As one of the most compliant and transparent stablecoins in the market, USDC is well-positioned to capture a dominant share of this explosive growth. Moreover, they argue that Circle is much more than just USDC. Through partnerships with payment and tech giants like Visa, Mastercard, Grab, and Mercado Libre, it is building a vast payments network. At the same time, its developer tools—such as the Cross-Chain Transfer Protocol (CCTP) and wallet services—are attracting tens of thousands of developers to build on its platform, generating powerful network effects that further solidify its leadership.
Beyond fundamentals, Circle’s surge has also ridden favorable regulatory tailwinds. Recent legislative progress, including the U.S. Senate’s passage of the GENIUS Act—a bill aimed at establishing a clear regulatory framework for stablecoins—has been interpreted as a major win for compliant players like Circle. Analysts widely believe that clearer regulation will accelerate adoption of USDC among mainstream financial institutions and enterprises.
The case of Circle’s IPO perfectly illustrates two divergent perspectives in capital markets: For founders, executives, and early VCs, this was a rational harvest after a long entrepreneurial journey. They face known risks—intense competition, systemic financial vulnerabilities, and regulatory uncertainty. In light of these, converting some paper wealth into real cash represents a prudent and wise financial decision.
For public market investors, however, they are betting on a far grander future. They believe that as the wave of digital economy surges forward, Circle—with its compliance advantage and technological moat—will become indispensable financial infrastructure in this new era, whose ultimate value vastly exceeds today’s valuation.
Did cautious insiders misjudge the rocket’s fuel? Or are exuberant outsiders ignoring the flight risks? The answer to this nearly $5 billion question may only be revealed by time.
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