Amid this "only rise, no fall" stablecoin frenzy, Circle's valuation is continuously surpassing market expectations.

The CRCL closed up 9.64% on Tuesday, reaching $263.45, with a market value surpassing the total USDC market cap for the first time, reaching $638.9 billion, up a staggering 749% from the IPO price. This rare "Stablecoin Parent Company > Stablecoin Itself" phenomenon is becoming a landmark moment in the integration of the crypto and traditional capital markets.

Meanwhile, institutions have begun to gradually realize their gains. According to Ark Invest Daily data, Cathie Wood's ARK Invest reduced its holdings of 415,844 CRCL shares on June 23, with a total value of approximately $1.095 billion based on the closing price that day.

Although the sell-off action signals some caution, with the bearish channels almost drying up and options prices lacking cost-effectiveness, the market is still engulfed in a one-sided bullish frenzy.

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Circle is undoubtedly the most fervent representative target in the crypto stock sector since June, with a gain of over 500% since its IPO on June 5.

On June 18, the CRCL stock price hit a new all-time high, with a market cap of $48.4 billion. According to Yahoo Finance data, the current circulating shares of Circle are approximately 36.34 million, accounting for 17.94% of its total outstanding shares (202.55 million shares). At the closing price of $199.59 on the 18th, the corresponding market cap is approximately $7.253 billion.

The rise in Circle's stock price has also simultaneously boosted Coinbase's stock price, marking the first divergence from coin price and trading volume surge since the COIN IPO.

Alongside Circle's record-high stock price, institutions have also begun to gradually profitably sell off.

ARK Rakes in $96 Million, Just Pure Profit

Reportedly, Circle plans to issue 24 million shares, raising $624 million, with a target valuation of $6.7 billion. ARK Invest subscribed for $150 million, and BlackRock led by Larry Fink invested $60 million, with these two institutions collectively securing approximately 35% of this round of fundraising.

On June 5, ARK Invest bought nearly 4.5 million shares of CRCL on the day Circle went public on, with a closing price valuation of approximately $373 million.

On June 16, as CRCL price surpassed $160 to hit a new all-time high, Ark Invest sold a total of 342,658 shares of Circle Internet Group Inc. across its three exchange-traded open-end index funds, with ARK Innovation ETF (ARKK) selling 196,367 shares, ARK Next Generation Internet ETF (ARKW) selling 92,310 shares, and ARK Fintech Innovation ETF (ARKF) selling 53,981 shares; totaling approximately $51.7 million.

On June 17, with CRCL stock price rising again above $160, Ark Invest's three ETFs sold over 300,000 CRCL shares, generating $44.76 million in revenue.

Despite selling over 600,000 shares, Ark Invest still holds nearly 4 million shares of Circle stock, valued at around $371 million, accounting for 6.13% of its ETFs. In other words, based on the current stock price, ARK's two recent sell-offs this week were merely selling off current CRCL holdings' profits.

Related Reading: "Crypto Bull Market, All in U.S. Stocks: Circle's Ten-Day Journey from $31 to $165"

Rug Pull, Pump and Dump: Can Cryptocurrency Enthusiasts Short Circle Now?

"Circle's market cap has surged to $40 billion, while the USDC it issues is only $60 billion." A seasoned trader's sentiment on social media reflects the cryptocurrency community's complex attitude towards CRCL's recent price action. The meteoric rise of CRCL since its listing not only mirrors the collective sentiment of the crypto market but also reveals the differences in cognition and gameplay between different trading groups.

Insiders familiar with the USDC operational logic should have been the earliest beneficiaries, but this round of IPO frenzy has shown a rare split—some people "held their noses and bought in," while others "understood the logic but found the valuation too high," ultimately missing out on the gains. Meanwhile, more traditional stock investors, due to information barriers and narrative differences, have directly jumped into CRCL, with bullish sentiment driving prices to the moon.

“Not daring to go all-in on CRCL may be a regret for a long time,” crypto trader yuyue wrote, “Until Circle firmly holds the leading position in this narrative, either in a USDT orthodox IPO on the US stock market (almost impossible) or surpassing USDC with USD1 and completing an IPO (currently hopeless).”

“My undefeated record in US stocks was lost on this coin stock of Circle!” Twitter user “甜梨” self-deprecatingly said, “Since Circle went public, chaos ensued. The logic in playing stocks before is no longer applicable; instead, the logic of trading coins must be used. Once involved, everything else becomes unclear. Now, the US stock market is like a chaotic brawl to me, belonging to the skilled drivers.” To “甜梨,” the fundamentals of Circle do not support this rally, but the short-term trend cannot be explained by conventional models.

Some traders attribute the short-term surge to a circulating market cap of less than 18%, drawing parallels to WLD’s extremely small-cap rally, once again providing cryptocurrency traders with an experience: “Fundamentals and short-term trends are two different things.”

Others choose to bet on the Beta effect. Crypto KOL Taiki wrote before Circle’s listing, “Companies like CRCL are essentially the pricing anchor for stablecoins. If it is worth $10 billion, the valuations of ENA and MKR will need to be recalculated.” Taiki took positions in DeFi blue-chip assets to capitalize on the overflow effect. Today, CRCL has skyrocketed to a market capitalization of 400 billion, while ENA and MKR’s performance is evidently not on par with CRCL.

Another group, who have not had a good outcome, have a simpler reason—they know too much. Deribit’s Lin once straightforwardly advised her family not to touch CRCL, as she believed that “Circle's revenue structure is too single, it has long been a red ocean; BlackRock’s BUIDL and Trump’s USD1 will squeeze their share.” Her judgment was not emotional but stemmed from a deep understanding of the stablecoin ecosystem. However, she also admitted that “In the cryptocurrency circle, knowing too much sometimes becomes a burden.”

Unlike cryptocurrency traders who repeatedly scrutinize valuation and fundamentals, US stock investors prefer to listen to stories. As crypto KOL Kay said on Platform X, US stock investors buying CRCL see “a grand leader of the country’s strategy, an alternative to VISA, roaring upward aiming for 2000,” while what the so-called real users in the cryptocurrency circle see is “high compliance costs leading to no profit, the ease of loss during interest rate cuts, the issuance volume relying heavily on subsidies, and a reasonable valuation of 30-50.”

Prior to this, Airwallex's co-founder and CEO Jack Zhang, who sparked market discussions by questioning the practical uses of stablecoins in a post on Platform X, wrote on the same platform, “It’s time to short Circle.”

But is now really the time?

The narrative around Circle's stock is not aimed at the crypto community. A Coinbase x Circle maxi, Chris, believes that seeing Circle as too expensive is a "crypto self-meme," stating, "You thought it was a crypto revolution for finance, but in reality, the financial industry not only joined crypto but also revolutionized it."

Some see Circle's IPO as a potential signal of a market top, similar to how Coinbase's listing day in 2021 coincided with the peak of Bitcoin's previous bull run. However, others disagree, stating, "This bubble is nowhere near as inflated as in 2021. Altcoins have already been through a harsh washout, and BTC dominance is still high."

More importantly, CRCL is a traditional IPO with a 180-day lock-up period, limiting immediate sell pressure, unlike the direct insider selling seen during the $COIN listing back then. Many hedge funds were unable to enter on the first day of trading, leading to them having to chase prices on the secondary market. Some shorting institutions are also facing extremely high annualized funding rates (over 5%), making it challenging to exert substantial pressure.

As Arthur Hayes puts it, "Should you short Circle? Absolutely not. You can choose not to buy, but do not short. Emotional premiums are the scariest form of momentum."

Perhaps Circle's current valuation is not yet justified. However, what it represents—a stablecoin platform supported by BlackRock, Fidelity, Visa, Coinbase, and others—has crossed the compliance threshold and entered the mainstream US stock market. Its valuation is not derived from crypto consensus but from the stock market's repricing of a "fintech compliance platform."

Hayes believes that Circle is significantly overvalued, but the price will continue to rise because this IPO marks the beginning of this round of stablecoin frenzy, not the end.

Related Reading: "Arthur Hayes: Stablecoin IPO Is a 'Dead End,' But I Advise You Against Shorting"

In a time when traditional payment giants have not yet made a massive entry, when USDT is unlikely to IPO, and when USD1 is still in a policy observation period, Circle may be the sole vessel for this narrative. "There is no real future because the newcomer's distribution channel is closed. Force this idea into your silly head, trade this sh*t like a hot potato, but do not short. These new stocks will make shorts lose everything."

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