After Circle officially listed on June 5, its stock price soared, once exceeding $200, with a market capitalization reaching $32.8 billion, accounting for 53% of the total market value of stablecoin USDC at $61.6 billion. CRCL keeps rising, and Ark's $700 million profit makes it the biggest winner on the table. However, hidden beneath the surface, Circle's long-term partner Coinbase actually held CRCL early on through a stock swap and missed out on Circle's rise. Is switching to buy COIN a viable option?
CRCL keeps rising, and Ark's $700 million profit makes it the biggest winner on the table.
Ark Invest has sold Circle stock for two consecutive days across three funds, cashing out nearly $100 million, becoming the biggest winner on the table.
Ark initially bought 4,363,244 shares of CRCL, which is 10% of the 34 million shares issued at the IPO. Based on the IPO price of $31, Ark's initial cost was only $135 million.
With the continuous surge of CRCL, Ark sold 342,658 shares on June 16 and another 300,108 shares on June 17. As of June 18, Ark still holds 3,720,478 shares of CRCL, valued at approximately $740 million. I speculate that Ark had to sell part of its holdings because the shareholding ratio had reached its limit, reducing the proportion of CRCL held in various funds to around 6%.
Currently, the rise of CRCL has brought Ark a total profit of $700 million. It seems that Cathie Wood can finally vent her grievances from recent years!
Realized profit and loss: approximately $76.57 million (estimated based on the closing price on the selling day and an IPO cost of $31)
Unrealized profit and loss: $627 million
CRCL keeps rising, is switching to buy COIN a viable option?
Arthur Hayes, the founder of BitMex, recently pointed out on his personal blog that the valuation of the US stablecoin concept stock Circle is too high post-IPO. However, he also warned against shorting CRCL and suggested buying Coinbase stock instead because Circle has a 50% revenue sharing agreement with Coinbase in exchange for adoption.
(The US stock CRCL has increased fourfold since its IPO! Arthur Hayes warns that the valuation is too high and suggests switching to buying this asset)
According to my calculations, Coinbase may hold 3.5% of Circle's shares. This hot IPO may have brought Coinbase nearly $1.1 billion in revenue, with an investment return of up to 21 times. Additionally, Coinbase receives nearly half of Circle's reserve earnings each year, making it an excellent investment!
(Circle's listing has greatly benefited Coinbase, which receives reserve earnings every year, and the investment return on its holdings is expected to multiply fivefold)
In contrast, COIN's stock price has only risen 16% in the past month, far behind CRCL's increase. However, this figure is merely my speculation based on Coinbase's recent financial reports, and I look forward to seeing more supporting data when the next earnings report is released.
This article 'CRCL keeps rising, and Ark becomes the biggest winner on the table; is switching from CRCL to buy Coinbase a viable option?' first appeared in Chain News ABMedia.
