The stablecoin market, the backbone of the cryptocurrency industry, is witnessing a dramatic showdown between two "giants": Tether and Circle. While Tether has dominated the market for many years, Circle is looking to assert its position, especially after its impressive IPO on Wall Street.
In early April, as rumors circulated about a possible delay in Circle's IPO, Paolo Ardoino, CEO of Tether, did not hesitate to express skepticism about the business model and listing plans of his rival. He bluntly stated that Circle "is not making money" and argued that the competitors' focus on "institutional acceptance" is shortsighted. Ardoino believes that Tether's distribution advantage is unreplicable, likening the attempt to catch up with Tether to a startup trying to build "another Amazon from scratch."
However, just two months later, Circle's IPO took place and broke all predictions. On Thursday, the shares of this stablecoin issuer soared more than three times the IPO target price of 31 USD on the first trading day, surpassing the 100 USD mark and pushing the company's fully diluted market capitalization to over 19 billion USD. The excitement for Circle's debut on Wall Street was so great that the New York Stock Exchange had to halt trading of CRCL shares multiple times.
Tether remains the largest stablecoin issuer in the world with a market capitalization exceeding 153 billion USD. However, Circle, with USDC having a circulating value of 61 billion USD, is emerging as a strong competitor, particularly with its commitment to adhering to strict financial regulations. While Tether has never publicly announced a full financial audit and USDT has been delisted in some more strictly regulated areas (such as the European Union), Circle is seen as a pioneering player in compliance.
In the context of the United States striving to pass a legal framework for stablecoin issuance, Tether has signaled that it may create a new token to meet these requirements while still keeping USDT focused on emerging markets. The stablecoin bills pending in the U.S. Congress will require issuers to provide detailed, audited proof of reserves and comply with strict anti-money laundering measures.
The exceptional success of the IPO on the stock market has surprised many analysts and is believed to be largely due to the "stablecoin frenzy" and the fact that many investors have yet to engage or remain on the sidelines in this space. This also highlights the reality that "you cannot invest in Tether" through traditional stock markets, creating a clear advantage for Circle in attracting capital from Wall Street.
Investing in cryptocurrencies carries high risks due to significant price volatility.
