Circle Stock Closes Out First Week of Trading 278% Above IPO Price

Key Takeaways

• After its first 5 days of trading, Circle stock (CRCL) climbed to 378% of its IPO price.
• CRCL closed Wednesday at $117.2 per share.
• Circle is positioned to benefit from rising stablecoin adoption.

In the week since Circle Internet Group (CRCL) listed on the Nasdaq, the stock has more than tripled its IPO price of $31 per share.

Much of the increase came on the first two days, when CRCL climbed from $69 to $107.7. However, in the days that followed, the stock continued to rise, closing out Wednesday, June 11, at $117.2.

Circle’s Blockbuster Debut

After a slow start in the morning, on day one of trading, CRCL jumped to a high of nearly $103.8 per share.

The stock ultimately closed the day at $83.2, marking a 21% increase from its opening price and more than a 120% increase from its IPO price.

Day two was even more impressive, with Circle’s share price climbing to highs of over $123.

Things leveled out somewhat on Monday, which was the first and, so far, the only day Circle ended, the day lower than it started.

Market Capitalization

$117.2 per share, Circle’s market capitalization stood at nearly $26 billion on Thursday.

The figure is good for IPO participants and Circle’s venture investors. But it still leaves plenty of room for growth.

The company is well-positioned to benefit from the adoption of a ballooning stablecoin market.

Its proponents believe Circle could one day stand shoulder to shoulder with financial giants like Visa and Mastercard, each worth more than half a trillion dollars.

How High Can CRCL Go?

While it is tempting to compare Circle to other payment firms, the company’s business model is currently closer to that of an asset manager.

Stablecoin transactions have already eclipsed the world’s most popular card schemes.

However, unlike Visa and Mastercard, Circle’s bottom line doesn’t depend on transaction volume. Instead, the firm generates most of its revenue from interest payments on USDC reserves.

A better comparison is a company like BlackRock, which has a market capitalization of around $154 billion and $11.6 trillion in assets under management.

Based on this equivalence, Circle would need to multiply the value of its stablecoin reserves nearly 20 times over to justify the same valuation.

While that is a big ask, the circulating supply of USDC has effectively doubled in the past year and climbed 8260% since 2020.