Breaking news! Following its IPO filing, Circle's secondary market valuation reaches $5 billion.

According to sources familiar with the matter, as stablecoin USDC issuer Circle Internet Financial prepares for an initial public offering (IPO), its valuation in the secondary market is between $5 billion and $5.25 billion. The company attempted to go public through a SPAC deal in 2022 with a valuation of around $9 billion, but ultimately was unsuccessful. In 2024, they are once again attempting an IPO.

Reuters: Circle, issuer of USDC, quietly files for U.S. IPO

Secondary Market Trading Involves Early Investors and Employees

It is reported that Circle has allowed some stocks to be traded on the secondary market, but these transactions are limited to specific cases and handled on a case-by-case basis. The main participants in these trades are early investors and Circle employees seeking liquidity.

A source stated that employees typically cash out stock options before a company goes public, a common practice in the tech and finance sectors. The source indicated that the sellers in these transactions are primarily early investors looking to cash out or Circle employees exercising stock options, allowing for liquidity and personal financial planning ahead of the anticipated IPO. Current trading restrictions ensure the company's valuation remains strong, making it attractive to potential new investors.

Significant Changes in Circle's Valuation

Comparison with 2022 Valuation

Circle's valuation has undergone significant changes from its peak of around $9 billion in 2022. The early valuation was related to Circle's attempt to go public through a SPAC deal with Concord Acquisition Corp. However, due to the U.S. Securities and Exchange Commission (SEC) failing to approve in a timely manner, and the crypto winter following FTX's collapse, the deal was terminated in December 2022.

Market Sentiment Impact, but No Cause for Concern

A source mentioned that investors should not be overly concerned about the disparity in valuation figures between 2022 and now. The current secondary market is considered very sluggish, with many investors willing to sell at any price due to the need for cash. This situation has led to lower valuations in Circle's secondary market transactions, but this may not necessarily reflect the company's actual potential value once it goes public.

Stablecoin Leader Circle's Compliance Strategy

Circle's USDC once rivaled Tether's USDT in terms of circulation, but after the 2023 Silicon Valley bank collapse, concerns over fund redemptions briefly caused the market price to decouple, leading to a decline in USDC's momentum. However, with the era of heavy regulation dawning, multiple jurisdictions have imposed strict regulations on stablecoin issuers, posing potential risks to the more mysterious Tether's market dominance.

Whether Circle can survive under a compliant strategy and capture more market share remains to be seen.

Will Circle, as the first MiCA-compliant stablecoin issuer, shake Tether's leading position?