Cryptocurrency IPOs Surge 800% as U.S. Policy Shifts

The cryptocurrency market's fervor is sweeping through global stock markets in an unexpected manner. Following Circle's stock price surge of 800% within two weeks of its IPO, several cryptocurrency exchanges, including Kraken, Gemini, and Bullish, are preparing for their own listings. One of the world's top three cryptocurrency exchanges has explicitly stated that it is considering an IPO in the United States. The shift in U.S. policy has fueled this trend, with the supportive stance of the administration and the potential for relaxed regulations significantly boosting market confidence.

The chief marketing officer of the exchange expressed that the U.S. attitude towards cryptocurrency has undergone a "major transformation" since the previous administration. "We will absolutely consider an IPO in the future, and if we do go public, it will likely be in the United States," the official stated. A partner at the cryptocurrency venture capital firm commented that "there is no better time for an IPO right now, as people are accelerating their timelines."

The cryptocurrency frenzy has shifted towards the stock market, sparking debates about valuation premiums. Unlike traditional cryptocurrency markets, the current excitement is more evident in stock market performance. Since its IPO on June 5 at $31 per share, Circle's stock price has soared to $240, giving it a market capitalization of $58 billion. This makes it one of the largest IPOs in recent years in terms of first-day gains. A company has become a market darling by holding Bitcoin. According to the cryptocurrency consulting firm, since the company's first Bitcoin purchase in 2020, global listed companies have announced plans to raise at least $72 billion for cryptocurrency acquisitions, with most transactions occurring in 2025.

The chief investment officer of the cryptocurrency fund management company noted that the interest of non-cryptocurrency investors in cryptocurrencies far exceeds that of actual cryptocurrency users. The performance of cryptocurrency stocks or proxy stocks has been better than that of cryptocurrencies themselves, a trend that has persisted for three to four months. Until 18 months ago, the cryptocurrency industry had little presence in the stock market. This changed in early 2024 with the approval of a Bitcoin spot ETF.

Despite the stock market's enthusiasm for cryptocurrency-related companies, there are significant divisions within the investor community. Traditional cryptocurrency investors are skeptical of the current premium phenomenon, believing that the valuation of listed companies holding cryptocurrency assets should not sustainably exceed the value of the assets themselves. A partner at the firm stated that "when the premium disappears, investors will quickly sell their stocks, and these phenomena are often short-lived." Last week, a company, which holds Ethereum, saw its stock price plummet 70% after allowing private placement investors to sell their shares, highlighting the market's volatility.

Investors also have differing views on stablecoins, which are pegged to the U.S. dollar at a 1:1 ratio. Cryptocurrency investors view Circle's stablecoin as having limited use, primarily for transactions. In contrast, stock market investors are more optimistic about the future of stablecoins, betting that they could become a major payment tool in the financial system. "The growth story we are now discussing is not a cryptocurrency story, but a traditional payment story... This is a world that most cryptocurrency enthusiasts do not understand," a partner at the firm commented.