Why Circle's IPO Is Sparking an Explosion on Wall Street

After stablecoin issuer Circle exploded 300% higher in its IPO, plenty of big players on Wall Street are taking a second look at their crypto strategies. That could very well trigger a second wave of hyper crypto institutionalization that has been building all year.

This week, Bernstein is pointing out that could spell a “critical inflection point” for Ethereum as a premium could once again return to onchain use cases. And right now, there is no greater use case being discussed than stablecoins. The question is: Is the juice worth the squeeze?

But before we get into why Circle’s IPO is forcing a recalibration on Wall Street, let’s first start with some facts:

• Circle priced shares at $31 in its IPO on Thursday

• Circle shares opened for trading at $69 on Thursday

• Circle shares opened for trading today at $132.72

So either someone got this one very wrong, or a large chunk of the market woke up to being severely underexposed to crypto and is now trying to figure out the right way to catch up. I would posit that the best way to play catch up is not through CRCL for a number of reasons.

But don’t take my word for it — take a look at the analysis from Fundstrat’s Sean Farrell — who says that even in a bull case, Circle shares should only trade at $119 if all goes great next year.

The thing is, yes, everyone expects the stablecoin market to continue to grow. But that doesn’t necessarily mean Circle’s business is going to justify the 4x it just pulled off in its IPO. For one thing, as interest rates come down, Circle will be able to make less off of the assets it holds in custody to back its USDC stablecoin. As Farrell estimates, “every 25 bps cut in the reserve rate reduces 2026 EBITDA estimates by roughly $100 million dollars, holding all else equal."

Then again, if you listen to Circle CEO Jeremy Allaire, it could very well be the case that Circle is just getting started with stablecoins and that future services could be built around what the company has already pioneered by bringing dollars onchain.

Could ETH Be A Better Play?

If you expect the stablecoin market to grow, you might do better by betting on Ethereum, according to Bernstein analysts.

In a new note, they point out that institutions are playing catchup on chasing the opportunities onchain, and that inflows seem to suggest the momentum is just getting started with ETH:

"Bitcoin is great, we love it and still believe $200,000 is our high-conviction but conservative price forecast this cycle," the analysts led by Gautam Chhugani wrote in a Monday note to clients. "However, we believe, the mainstream interest is broadening beyond the 'store of value' Bitcoin use case toward the early stages of the financial innovation unleashed by the blockchain. Some investors still draw the line between blockchain (useful tech) and crypto ('useless') … [but] Ethereum 'deserves love,'" they said.

As CoinShares’ weekly report also noted, Ethereum has seen inflows into crypto investment products pick up recently. Bitcoin actually saw net outflows, while Ethereum-based funds led for the second consecutive week — good enough to keep the total crypto inflows in the green:

JPMorgan Comes Around on Crypto

In perhaps the largest piece of evidence to show just how far we’ve come — even JPMorgan is going to start taking crypto holdings into account and begin by letting clients use their Bitcoin ETF holdings as collateral.

The news flew somewhat under the radar last week, but it’s a pretty substantial change in the way that one of the largest asset managers looks at crypto. It wasn’t too long ago that Jamie Dimon was actively hammering the whole “crypto is a pet rock” thing on CNBC. In fact, please enjoy this runback through Jamie Dimon’s crypto takes through the years as Bitcoin has more than 200x’d in price:

Now, for some clients, JPM will also factor crypto holdings into assessing net worth and liquidity — grouping in crypto with other assets like art and securities.

Was Coinage Right All Along?

It’s clear at this point that Wall Street is increasingly leaning into crypto — and that crypto is increasingly leaning into traditional finance. (As we covered recently, publicly-traded Solana treasury companies are becoming the next trend to chase what Michael Saylor pioneered with Bitcoin.)

But if you’re like me, and got into crypto because it specifically offers things that are unique and better than normal securities, then this may be a very confusing chapter.

If the coolest thing about crypto becomes “you can trade it like a stock” or “the centralized company that issues the dollar you just used just 4x’d” — well, then I’m not sure why we really need crypto anymore.

But, if you believe in decentralization and community-ownership over networks that drive value accrual back to holders, then Coinage has an exciting update.

We started this project three years ago as the first community-owned Web3 outlet to create a more trusted media brand. One that could provably show it wasn’t just owned by someone with an agenda. And to deliver on that, we’ve always offered the chance to buy into our Coinage DAO as a US-registered cooperative.

Now, as we’ve crossed 550 mints of our NFTs — the Coinage DAO has opened a proposal to increase pricing on the tokens that empower base ownership over Coinage from 0.11 ETH to 0.25 ETH. The proposal also clears a path to raise pricing to 0.5 ETH as we approach the 1,000 target on the maximum 5,000 Caucus memberships Coinage will ever offer.

We thank all of those who have contributed to the Coinage experiment in our first three years, and to those who used their NFTs to receive our first distribution. Together, we’re incredibly proud to show that crypto has a purpose outside of just fueling publicly-traded treasury loops — and we look forward to continue building value for our community of users (not just shareholders.)

If you’d like to join us on that journey, consider minting a membership today!