Circle and Coinbase — a story of two public offerings

Circle, the largest United States-domiciled stablecoin issuer, had an explosive first day of trading as it launched its initial public offering (IPO), rocketing to a peak of over $103 from an IPO price of $31.

This increase in stock price values Circle at approximately $20 billion.

This increase, besides suggesting that Circle could have priced its IPO higher, also leads to an interesting comparison with one of the earlier major US public offerings, Coinbase.

Read more: Circle vs. Tether: What’s in the reserves?

Coinbase didn’t use an IPO but instead had existing shareholders sell directly, with an initial reference price of $250. However, it actually opened at $381 and ended its first day of trading lower at $328.

At the closing of its first day, Coinbase had a fully diluted valuation of approximately $85 billion.

The relationship between Coinbase and Circle

Coinbase and Circle are both co-founders of the CENTRE Consortium, which was previously the issuer for the USDC stablecoin.

However, in 2023, the CENTRE Consortium was shut down, Circle took over more responsibilities for USDC, and Coinbase took an equity stake in Circle.

More recently, before this IPO, it was reported that Circle was considering an acquisition by Coinbase that would have valued the stablecoin issuer at approximately $5 billion.

This, and the similarly reported Ripple acquisition, never came to fruition, and the public market appears to have valued Circle more highly than the rumoured acquisition price.