Circle shares surge 245% since IPO as Senate bill passage feeds stablecoin fever
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Circle Internet, the only publicly traded stablecoin issuer in the U.S., extended its extraordinary post-IPO run Friday after securing its first analyst buy rating.
Why it matters: The bullish outlook for stablecoins continues to grow, fueled by the U.S. Senate's recent passage of legislation that would establish a clear regulatory framework for domestic issuers.
State of play: Circle's IPO priced at $31 on June 4, and opened trading the next day at $69. It's up 245% from that point as of Friday afternoon.
- It was the fifth-most actively traded name on the NYSE Friday.
- And the company's market cap has swelled nearly $40 billion from where it ended its first day of trading, at under $19 billion.
The latest: The buy rating from Seaport Global reflects its view that Circle, the issuer of USDC, is well positioned to benefit from an expected surge the global market for stablecoins.
Catch up quick: Dollar-backed Stablecoins are cryptocurrencies pegged to the value of a U.S. dollar, backed one-for-one by cash or other highly liquid instruments such as short-term U.S. Treasuries.
- They are mainly used to facilitate crypto trading, but are increasingly being eyed for use in payments.
By the numbers: Customers have already deposited $61 billion to receive USDC. But that still puts the stablecoin at a distant second place in terms of market cap to USDT, issued by Tether. There's a huge gap from USDC to number three, however.
What we're watching: Shortly before its IPO, Circle announced the Circle Payment Network, a compliance ring fence around its stablecoin ecosystem, making it easier for highly regulated companies to take advantage of stablecoins' speed and low-cost.
Worthy of your time: A trillion-dollar stablecoins 'Game of Thrones' is underway.
