Circle’s CRCL stock skyrockets 22% in pre-market trading amid fervent institutional interest

Circle’s CRCL shares are drawing strong interest following the company’s recent listing on the New York Stock Exchange. The firm, best known for issuing the USDC stablecoin, has seen its stock price rise sharply since launch.

Data from Yahoo Finance shows Circle’s stock climbed nearly 22% in pre-market trading, reaching above $130 before retracing slightly at open to $123. This follows an earlier surge during its IPO launch that pushed the stock to $107 at the close of trading on June 6.

Industry observers have pointed out that Circle’s recent IPO ranks among the most successful fintech offerings in recent years. It is also the largest US fintech IPO since Coinbase’s debut in 2021, highlighting growing institutional appetite for blockchain-related firms entering public markets.

Why Circle’s CRCL is performing strongly

Market analysts attribute Circle’s strong stock performance to overwhelming demand from institutional investors.

One clear example is Japanese financial conglomerate SBI Holdings, which announced a $50 million investment in Circle. This includes a $25 million contribution from SBI Holdings and another $25 million from its subsidiary, SBI Shinsei Bank.

SBI highlighted the strategic nature of the investment, which aligns with its partnership to expand USDC usage in Japan.

Meanwhile, other major institutional players are also backing Circle’s public listing. For context, ARK Investment Management, led by Cathie Wood, is reportedly interested in taking a $150 million stake in the firm.

Analysts view these investments as a strategic bet on the rising demand for US dollar-pegged stablecoins. They also noted that the success signals a broader market recognition of stablecoins’ role in driving mainstream crypto adoption.

However, not everyone in the crypto community is celebrating. DeFi analyst Ignas voiced concerns that Circle’s success benefits traditional finance (TradFi) over on-chain users, who see no direct rewards from USDC’s growth.

He lamented:

“Crypto is amazing because it rewards early adopters: from BTC, ETH, to multiple airdrops. Yet, the upside from Circle’s success leaves onchain users sidelined. We got no base yield from USDC, no stocks, no airdrop… anything. Sure, we can buy CRCL with TradFi accounts but it siphons money from crypto to TradFi.”

Nonetheless, he conceded that Circle’s progress will spur on-chain transaction activity, boosting valuations for underlying blockchains.