Circle Preps NYSE Listing; Strong Institutional Appetite Signals Crypto Infrastructure Play Value

Investors seeking indirect exposure to the cryptocurrency ecosystem via traditional stocks may soon have a new entry point: Circle, issuer of the popular US Dollar Coin (USDC) stablecoin, is expected to list on the New York Stock Exchange shortly, signaling robust institutional interest.

Confirming Demand

In a noteworthy development following its initial public offering (IPO), Circle announced a significant increase in the planned share count from 24 million to 32 million shares and raised its anticipated price range per share to between $27 and $28, originally set between $24 and $26.

These upward adjustments, typically made after thorough demand assessments, are viewed as a clear indicator of strong investor appetite, particularly from institutions, according to market observers. “Upsizing the number of shares expected to be sold as well as the price range is a crystal-clear signal of strong demand,” explained Architect Partners co-founder Eric Risley.

Risley noted that while an adjusted valuation target (roughly $7.2 billion, below Circle’s $7.7 billion valuation from April 2022 funding) suggests potential cooling from pre-IPO valuations, the specific terms announced reinforce the expectation of an imminent listing under its proposed ticker, CRCL.

Institutional Backing Bolstered by Ark Invest

The institutional pull appears substantial, with Ark Invest confirming interest, potentially allocating up to $150 million in Circle’s Class A common stock at the higher price point.

Ark’s digital assets research director, Lorenzo Valente, has highlighted the significant growth potential in the stablecoins sector. “Stablecoins settle more transaction volume across all blockchains than either Bitcoin or Ethereum,” Valente wrote last February, and recent data suggests the industry’s market cap could expand dramatically from its current ~$235 billion to $1.4 trillion by 2030 (based on rwa.xyz data).

Valente emphasized stablecoins’ foundational utility: “They settle more transaction volume… highlighting their growing dominance as the foundation of onchain activity.”

Positioning as Core Infrastructure

“In a sector still defined by volatility and regulatory overhang, Circle is positioning itself as the ‘boring is beautiful’ trade: profitable, minimally levered, and plugged into the core financial infrastructure of Web3.” – Matthew Sigel, VanEck’s Head of Digital Assets Research

Focusing heavily on Circle’s role as the “most institutionally integrated company in crypto,” VanEck’s Sigel described its business model as akin to a high-yield, regulated stablecoin utility. Core revenue derives from interest earned on USDC reserves, similar to a money market fund but leveraging blockchain for programmability and 24/7 settlement. This positions it favorably for institutions seeking regulated crypto exposure without taking balance sheet risk.

Sigel downplayed the potential appeal for investors seeking the “hype factor” of established names like Coinbase (COIN), which features prominently in VanEck’s Onchain Economy ETF (NODE). COIN recently saw shares dip from an April 2021 peak near $430 to around $260, though it now holds a ~4% allocation in NODE.

Market Outlook and ETF Considerations

Circle labels “intense and increasing competition” from USDT issuer Tether and “fluctuations in interest rates” among its key risks. Despite these headwinds, Sigel characterized Circle as a rarity: “rare to find a crypto-native company that is ‘profitable, growing, capital-light and central to stablecoin infrastructure’.”

This unique positioning will form a crucial part of evaluation criteria for Circle’s listing in investment vehicles like the Onchain Economy ETF (NODE). Similarly, other crypto equity ETF managers, including those from BlackRock and Franklin Templeton (Exodus, Galaxy, DeFi Technologies), are actively considering positions in Circle amidst a burgeoning category of US-listed crypto and blockchain stocks.

Market commentary following its listing will closely track if Circle diverges from the post-IPO trajectory of Coinbase, reinforcing its standing as the foundational payments layer of the Web3 ecosystem.