Circle Confidentially Files for an IPO Amid Massive Crypto Wins

Barely days after the SEC approved Spot Bitcoin ETFs for trading in the United States, cryptocurrency company Circle Internet Financial has confidentially filed for an initial public offering in the US, unveiling its plans on January 11.

Circle Internet Financial is behind the popular USDC stablecoin and is currently the biggest competitor to the USDT. With a market cap of over $25 billion, USDC is a big deal, although it still significantly trails USDT, which currently has a market cap of $94.65 billion.

The latest filing is not the first IPO attempt from Circle. A Special Purpose Acquisition Company (SPAC) deal with Concord Acquisition Corp. in 2021 fell apart in 2022 against the backdrop of the Silicon Valley Bank collapse. Amid the Spot Bitcoin ETF approval, Circle Internet Financial tried its luck again.

Why did the 2022 SPAC IPO Plan Fall Apart?

Recall that USDC had plans to file for its initial public offering in 2022 through a Special Purpose Acquisition Company (SPAC), where it valued itself at $9 billion. It had to abandon the plan towards the end of the year in a move that CEO Jeremy Allaire termed “disappointing.”

“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy”, the Circle CEO said in a statement. The decision by Circle to repeat its IPO bid without combining with a SPAC is not surprising.

What caused the breakdown was the loss of interest in the IPO deal by Concord by the December 10, 2022, deadline. They allowed the deadline to elapse. Also, the company failed to activate the option to seek a two-year extension, allowing the deal to die peacefully.

How Circle Excellently Timed the Filing

Circle Internet Financial filing its IPO is not a coincidence. Support and goodwill for cryptocurrencies and related products are growing. 

For one, Coinbase recorded a 400% growth in 2023, and the SEC recently approved spot Bitcoin ETFs in the United States.

With the IPO using these events as a backdrop, it’s difficult to see how it could fail, even with apparent hostility from the SEC against crypto companies and projects. Consequently, the attempt could have far-reaching effects on the cryptocurrency sphere, and approval could easily metamorphose into another crypto boom.

Why the Circle IPO Has Huge Potential 

While reacting to the news, observers pointed out that the Circle IPO could represent an unlock for the cryptocurrency industry as a whole. With most crypto-based firms still privately traded, a successful IPO by Circle will change that convention, encouraging more crypto firms to file theirs, subsequently creating a wave of market activity and interest. 

However, the cryptocurrency community should not count their chickens before they hatch. The Circle IPO is still subject to a review process by the SEC, which is subject to market and other conditions.

With its financial standing and a favorable outlook on the cryptocurrency industry, most observers expect nothing less than approval from the SEC for Circle. There are no details about the number of shares or the price range yet.

As usual, stakeholders in the crypto community online have responded to the Circle IPO plans, almost unanimously viewing the attempt in a positive light. Jason Yanowitz, funder at Blockworks, appears to believe in the potential ripple effect of the IPO on other crypto companies.

“There are 6-10 companies waiting to see how Circle does. If they’re successful, everyone else will push to IPO,” he posted on X, the platform formerly known as Twitter.

Gumshoe, a prominent cryptocurrency influencer, and GummiesArt owner, is “convinced that Circle’s IPO will be the top, not the Spot Bitcoin ETF.” While that seems like an unpopular take, the boom from several companies filing for an IPO will likely beat any buzz Bitcoin ETFs will generate.

In any case, the outcome depends on the results of the review by the SEC. If Circle Internet Financial ends up getting listed as a public company, it will undoubtedly have massive effects on the industry, mostly positive.