Circle Shares Surge 22% Post IPO on Institutional Demand

Circle’s CRCL shares have experienced a significant surge in pre-market trading, climbing nearly 22% and reaching above $130 before retracing slightly at open to $123. This follows an earlier surge during its IPO launch that pushed the stock to $107 at the close of trading on June 6. The firm, best known for issuing the USDC stablecoin, has seen its stock price rise sharply since its listing on the New York Stock Exchange.

Industry observers have noted that Circle’s recent IPO ranks among the most successful fintech offerings in recent years. It is also the largest US fintech IPO since Coinbase’s debut in 2021, highlighting growing institutional appetite for blockchain-related firms entering public markets.

Market analysts attribute Circle’s strong stock performance to overwhelming demand from institutional investors. One clear example is Japanese financial conglomerate SBI Holdings, which announced a $50 million investment in Circle. This includes a $25 million contribution from SBI Holdings and another $25 million from its subsidiary, SBI Shinsei Bank. SBI highlighted the strategic nature of the investment, which aligns with its partnership to expand USDC usage in Japan.

Meanwhile, other major institutional players are also backing Circle’s public listing. For context, ARK Investment Management, led by Cathie Wood, is reportedly interested in taking a $150 million stake in the firm. Analysts view these investments as a strategic bet on the rising demand for US dollar-pegged stablecoins. They also noted that the success signals a broader market recognition of stablecoins’ role in driving mainstream crypto adoption.

However, not everyone in the crypto community is celebrating. DeFi analyst Ignas voiced concerns that Circle’s success benefits traditional finance (TradFi) over on-chain users, who see no direct rewards from USDC’s growth. He lamented that the upside from Circle’s success leaves on-chain users sidelined, with no base yield from USDC, no stocks, no airdrop, or anything. He conceded that Circle’s progress will spur on-chain transaction activity, boosting valuations for underlying blockchains.