After President Donald Trump’s reelection in November, optimism surged among crypto companies focusing on the public market. Trump has a big promise: clearer rules for the industry and ambitions to make America the world’s crypto capital.
For a while it seemed like the floodgates might open. The IPO pipeline is bustling with activities. The founder dreamed of ringing the opening bell. However, underneath the surface there were storm clouds. Bluemarket is the lifeline of a successful list, with few foreshadowing how rocky the road ahead will be.
The circle didn’t wait for it to be perfect. After years of false start and hanging of regulations, the Stablecoin issuer finally filed an S-1 with the U.S. Securities and Exchange Commission (SEC) on Tuesday, taking the long-standing step towards becoming a publicly traded company.
The filing landed with a mixture of energy and doubt. Some people in the industry saw it as a bullish signal. This is another crypto heavyweight approaching the public market. Others questioned the timing. The market remains unstable and the circle’s path to a successful debut is not guaranteed.
“We believe that circles can raise capital by setting IPO prices, but that’s not easy,” said David Pakuman, Coinfund’s head of venture investment and head of venture investment. “In general, companies that are publicly traded would like to debut in a strong stock market.”
Stocks have fallen free since Trump announced so-called mutual tariffs on around 90 US trading partners, including China and the European Union, and deepen the fear of a global recession. Both the S&P 500 and the NASDAQ have soaked 11% and 17% since the start of the year, marking one of the worst quarters in recent years.
As a result, cloud computing company CloudWeave, released last month, saw its disappointing debut despite stocks recovering on the second day of trading, as demand for AI companies’ investors appears to be stronger than short-term uncertainty in the market. Payment app Klarna said it had suspended its IPO plan earlier today.
However, circles are not only facing wider market uncertainty as a potential threat to IPOs. Analysts point to the company’s finances, which can make it difficult to attract investors.
“I personally have incredible respect and appreciation for the circle and their leadership, but their finances demonstrate the challenges they faced with the growth and high costs of their distribution partnership,” Pakuman pointed out that he still believes in the long-term value of the company.
Circle’s IPO submission revealed a reduction in gross profit and high spending.
“Circles are now priced like traditional crypto businesses – periodic, interest-dependent, and not diversified enough. As circles evolve to look like payment networks with margins and strong moats, that valuation may reflect that.”
According to Valente, not only does its revenue sharing agreement evolve, but many aspects of the company’s structure seem to be at issue, such as the blockchain where Base’s growth was created by Coinbase.
“One precaution is a low rating, but there are still hurdles as it takes time to deploy and implement digital rails in the banking system,” said Mark Connors, chief investment strategist at Risk Dimension at New York-based Bitcoin Investment Advisory.
The circle’s $4 billion to $6 billion rumour valuation is about 13-20 times its adjusted EBITDA and is in line with Coinbase and the Bloc, “it’s not necessarily cheap, especially given the recent decline in profitability,” Valente said.
“We prefer the growth outlook for US-backed stable coins based on growing commercial use, the winds of US regulations and legislation (genius law) and the US Treasury incentive to find new, growing buyers for the US T-Bill US Treasury.”
More than $6 trillion in Treasury bills will be taken over this year, potentially funding the still growing US deficit.
Despite market uncertainty over the rest of the year, several other cryptocurrency origins are looking to make their IPO dreams come true, including Kraken, Gemini, BlockChain.com, Bullish (Coindesk’s parent company), and Bitgo. It is rumoured that many more crypto companies are meeting to be made public.
However, others may put an IPO plan on hold as they await regulatory clarity and better market conditions. Analysts at Crypto M&A Advisory Firm Architect Partners expect the majority of the IPOs will be filed in the second half of 2025 after the written regulations and policies are clearly completed.
