Circle Goes Public: Will the Crypto Market Soar or Stumble Due to Circle IPO?

TL;DR

• Circle’s recent IPO on June 5, 2025, has sparked significant discussion in the cryptocurrency market, drawing parallels to Coinbase’s 2021 debut, which preceded a market downturn.
• While similarities exist, such as high Bitcoin profitability and low capital inflows, differences like the Federal Reserve’s higher interest rate environment and potential regulatory advancements (e.g., the GENIUS Act) suggest a more nuanced outcome.
• Circle’s listing could enhance market trust, strengthen USDC’s position, and attract institutional capital, potentially driving long-term growth despite short-term volatility risks.

Introduction

Circle’s initial public offering (IPO) on the New York Stock Exchange (NYSE) under the ticker CRCL has ignited debate within the cryptocurrency community. The stablecoin issuer’s shares surged 167% on their debut, closing at $83.23 from an IPO price of $31 (its share price now stands at $105.91 as of June 11, 2025). This explosive performance has led some to question whether Circle’s IPO could, like Coinbase’s listing in April 2021, signal a market peak followed by a downturn.

At the time of Coinbase’s debut, Bitcoin was trading near $60,000, only to enter a bear market shortly after. Will Circle’s IPO trigger a similar collapse, or could it pave the way for a new era of growth in the crypto market? This article explores the parallels between these events, key differences, and Circle’s potential long-term impact on the cryptocurrency ecosystem.

Circle’s Current Listing Node Compared to Coinbase’s

Circle’s IPO on June 5, 2025, and Coinbase’s listing on April 14, 2021, share striking similarities in market conditions, raising concerns about a potential repeat of the post-Coinbase bear market. However, these parallels do not guarantee an identical outcome. By examining on-chain data and market dynamics, we can identify patterns that offer insights for investors navigating this pivotal moment.

First Similarity: Bitcoin Profitability at High Levels

During Coinbase’s IPO (April 14, 2021), Bitcoin’s percent supply in profit — a metric indicating the proportion of Bitcoin held at a value above its acquisition cost — was 98.45% (as shown in the red circle displayed in the image below). This means 98.45% of bitcoins were in profit, reflecting a highly overheated market.

Source: Glassnode

Similarly, at the time of Circle’s IPO (June 5, 2025), Bitcoin’s profitability stood at 89.17%, quickly rising to around 99% shortly after, signaling a comparable level of market exuberance (as shown in the red circle displayed in the image below). This high profitability suggests that most Bitcoin holders are in profit, often a precursor to profit-taking that can depress prices. The similarity to Coinbase’s listing indicates that Circle’s IPO may reflect an already overheated market, where speculative enthusiasm could lead to volatility if sentiment shifts.

Source: Glassnode

Second Similarity: Relatively Low Capital Inflows

Another parallel is the state of capital inflows into the cryptocurrency market. At the time of Coinbase’s IPO, market inflows were at a relative low, with a brief uptick in the following month before peaking in May 2021 and declining sharply thereafter (as shown in the red circle displayed in the image below). This lack of sustained capital contributed to Bitcoin’s subsequent price drop.

Source: Glassnode

Similarly, at Circle’s IPO, capital inflows remain subdued compared to the peak in December 2024, when Bitcoin reached similar price levels. Current data suggests inflows may have plateaued, lacking the momentum to drive further price gains (as shown in the red circle displayed in the image below). This stagnation in capital flow raises concerns about the market’s ability to sustain its current valuations without fresh investment.

Source: Glassnode

Can Circle Avoid Triggering a Crypto Market Crash?

While the similarities between Circle’s and Coinbase’s IPOs suggest a potential market peak, several factors could mitigate the risk of a broad crypto market collapse. Two key elements — the Federal Reserve’s monetary policy and emerging regulatory frameworks — offer hope that Circle’s listing might not herald a bear market but instead catalyze long-term growth.

First Factor: Different Federal Reserve Interest Rate Environment

At the time of Coinbase’s IPO, the U.S. federal funds rate was near zero (0.07%), leaving the Federal Reserve with little room to stimulate markets through rate cuts in the event of a downturn (as shown in the image below).

Source: MacroMicro

In contrast, at Circle’s IPO, the federal funds rate stands at 4.33%, providing significant leeway for monetary easing (as shown in the image below). With no rate cuts implemented in 2025 as of June, the Fed has ample space to lower rates if economic conditions warrant, potentially injecting liquidity into risk assets like cryptocurrencies. Such a move could bolster Bitcoin and other digital assets, countering downward pressure and supporting market stability.

Source: MacroMicro

Second Factor: The GENIUS Act and Potential Capital Inflows

The proposed GENIUS Act, which aims to establish a regulatory framework for stablecoins in the U.S., represents a significant tailwind for the crypto market. As noted in the previous CoinEx Academy article, the GENIUS Act could attract substantial long-term capital inflows by providing clarity and legitimacy to stablecoin issuers like Circle. If passed, the GENIUS Act could accelerate stablecoin adoption in payments and decentralized finance (DeFi), driving demand for assets like Bitcoin and Ethereum. While short-term volatility remains a risk, the long-term influx of institutional and retail capital could foster a sustained bullish trend, distinguishing Circle’s IPO from Coinbase’s.

How Will Circle Influence the Crypto Market?

Despite short-term concerns about market overheating, Circle’s IPO is poised to deliver significant long-term benefits to the cryptocurrency ecosystem. By enhancing trust, consolidating USDC’s market position, and capitalizing on an improving regulatory environment, Circle could drive increased adoption and liquidity in the crypto market.

• Strengthening Market Trust and Compliance: Circle’s successful NYSE listing marks a milestone for the stablecoin industry, signaling its integration into mainstream finance. USDC, pegged 1:1 to the U.S. dollar, is audited monthly by independent accounting firms and complies with U.S. and EU regulations, offering greater transparency than its competitor, Tether (USDT). As a publicly traded company, Circle faces stricter oversight and disclosure requirements, boosting its credibility among institutional investors. This enhanced trust could attract significant capital inflows, increasing liquidity and supporting price appreciation for major cryptocurrencies like Bitcoin and Ethereum.
• Solidifying USDC’s Market Position: Circle’s IPO reinforces USDC’s role as a leading “compliant digital dollar,” particularly in DeFi, cross-border payments, and real-world asset (RWA) tokenization. USDC’s use cases are expanding, from DeFi lending to supply chain finance, reducing transaction costs and enhancing efficiency. As USDC adoption grows, so does the crypto market’s overall transaction volume, indirectly boosting demand for assets like Bitcoin, Ethereum, and other major tokens.
• Leveraging an Improving Policy Environment: The GENIUS Act’s potential passage, alongside global regulatory developments like Hong Kong’s Stablecoin Ordinance Draft, provides a clearer framework for stablecoin operations. Circle, as a compliance-focused issuer, is well-positioned to benefit, potentially attracting more institutional players to the crypto space. This optimistic regulatory outlook could drive bullish sentiment, supporting price growth for Bitcoin and other assets.
• Catalyzing Broader Crypto IPOs: Circle’s blockbuster IPO, which outperformed tech giants like Meta and Airbnb, signals strong investor appetite for crypto-native firms. This success could pave the way for other crypto companies, such as Kraken and Gemini, to pursue public listings, further integrating digital assets into traditional finance. Increased public market exposure could enhance the sector’s legitimacy and attract additional capital, fostering long-term growth.

Conclusion

Circle’s IPO on June 5, 2025, has reignited discussions about the crypto market’s trajectory, with parallels to Coinbase’s 2021 listing raising concerns about a potential downturn. High Bitcoin profitability and low capital inflows mirror the conditions preceding the post-Coinbase bear market, suggesting short-term volatility risks.

However, key differences, such as the Federal Reserve’s higher interest rate environment and the potential impact of the GENIUS Act, offer hope that Circle’s listing may not trigger a crash but instead herald a new phase of growth. By enhancing trust, consolidating USDC’s market position, and capitalizing on regulatory tailwinds, Circle could drive long-term liquidity and adoption in the crypto market.

Investors should remain cautious of short-term fluctuations but recognize the IPO’s potential to strengthen the industry’s foundation, positioning cryptocurrencies for sustained growth in an increasingly legitimized financial landscape.

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