Circle IPO Sparks Controversy in the Encryption Industry

Circle recently completed its initial public offering ( IPO ), with impressive stock performance; however, its allocation process has sparked widespread controversy within the encryption community. As the issuer of the USDC stablecoin, Circle was supposed to be a milestone for the cryptocurrency industry moving towards mainstream finance, yet its IPO allocation strategy has faced criticism from industry insiders.

Analysts have pointed out that Circle tends to favor traditional financial institutions in its allocations, while neglecting native crypto participants. This approach is seen as deviating from the core principle of "aligned interests" in the crypto industry and has raised concerns about Circle's future direction.

Circle's IPO was priced at $31, higher than the expected range. The closing price on the first day was $84, and it surpassed $107 a week later, indicating a positive market outlook for the stablecoin business. Supporters believe that as the first publicly listed investment target focused on stablecoins, Circle is expected to benefit from the rapid growth of the stablecoin market.

However, some have questioned Circle's business model. Critics point out that its revenue overly relies on interest income, and there has been limited revenue growth over the past three and a half years. Based on the current stock price, Circle's valuation level is considered high.

What has sparked more controversy is Circle's IPO allocation strategy. It is reported that many encryption funds and early USDC supporters received very few or even zero allocations, which is seen as Circle's bias towards traditional Wall Street and neglect of native encryption supporters.

Industry insiders have stated that Circle's actions are a betrayal of long-term supporters and a departure from the spirit of encryption. They believe that Circle should have used this opportunity to reward the crypto institutions that drove the early development of USDC, rather than allocating shares to traditional funds that may not understand encryption.

Whether Circle's approach will affect the future development of USDC remains to be seen. However, this event undoubtedly provides a thought-provoking case for how encryption companies balance traditional finance with encryption concepts.