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The Donald Trump administration’s backing for ease of issuance and trading of cryptocurrencies has spurred a frenzy of IPOs in the virtual digital assets space. Sample the listing of Gemini, a crypto exchange founded by the Winklevoss twins of Meta-owned Facebook fame, on Friday at $4.4 billion — a premium of 32.2 per cent over its IPO valuation. In another listing, blockchain lender Figure Technology Solutions garnered $787.5 million in its IPO, and listing on the tech-heavy Nasdaq stock exchange in the US at $36 apiece, up from its IPO price of $25 apiece on Thursday.
Gemini and Figure join an array of crypto-related companies whose public listing indicated bullish sentiment for virtual digital assets under an enabling administration in the US.
In June, stablecoin issuer Circle Internet Group raised its valuation to $7 billion in the run-up to its IPO. The company’s stock listed at $69 apiece, nearly doubling in valuation on debut. Circle’s stock was valued at $125.30 per share, down 6.28 per cent at 10:15 AM IST on Monday. The USDC stablecoin issuer’s CEO credited engagement with policymakers for the company’s success. “Because if you want this to work for mainstream, it’s got to work in mainstream society and you need to have those rules of the road,” he told CNBC.
Bullish, the parent of crypto exchange CoinDesk raised its IPO size to $1.11 billion, above its IPO price of $37 apiece. Bullish’s stock listed at $90 apiece in August. The company’s stock was valued at $51.84 apiece, down 3.94 per cent on Monday at 11:15 AM IST. Speaking to CNBC after the listing, Tom Farley, the chief of venture capitalist Peter Thiel-backed Bullish said, ‘…The institutional wave has begun… It’s here, and it’s a question of how big it will be.”
“Based on the reception we’ve gotten thus far as part of our IPO, it feels like institutional investors feel like this could be the moment,” Farley said.
Tether, the issuer of USDT, the largest US dollar backed stablecoin, said it plans to create another stablecoin — fiat currency-backed crypto token — called USAT. The new stablecoin will be regulated by the GENIUS Act, which means it is likely to be backed by US Treasury Bills. “USAT is our commitment to ensuring that the dollar not only remains dominant in the digital age, but thrives,” said Tether CEO Paolo Ardoino on Friday.
USAT will be led by Bo Hines, a former White House official who said Tether’s “expansion will be exorbitant over the course of the next 12 to 24 months.”
Tether’s current market capitalisation stands at $169 billion, Reuters reported, citing crypto data platform CoinGecko.
The USAT stablecoin will be issued by Anchorage Digital Bank while VC firm Cantor Fitzgerald will operate as its custodian and primary dealer, according to Ardoino.
Analysts at JPMorgan in a note in April said stablecoins are expected to become the third largest investors in US Treasuries. Tether is the seventh largest investor in US government debt, having invested over $33.1 billion in US Treasuries last year, it said in an official statement.
To be sure, Tether has been the subject of government probes into alleged blurring of boundaries between investor and corporate funds at its sister company Bitfinex, Reuters reported. Ardoino said there were no indications that the company was being probed.
US President Donald Trump has constantly advocated for the easing of cribs on trading of and investment in cryptocurrencies, and more importantly, dollar-backed digital assets called stablecoins. This comes as his sons Eric and Donald Trump Jr promote the $WLFI token issued by World Liberty Financial, a company with ambitions of operating a crypto treasury, exchange and digital wallet, besides having interests in crypto mining infrastructure.
Earlier this month, Eric Trump attended crypto-focused events in Hong Kong and Japan in which he spoke about the possibility of the bitcoin hitting a $1 million valuation. Under criticism for blurring the lines between business and policy, President Trump has prevailed upon US markets regulator, the Securities and Exchange Commission and retail investor protection watchdog, the Commodity Futures Trading Commission, to ease the path for greater participation in cryptocurrencies.
Apart from passing the GENIUS Act to legalise stablecoins, Trump has issued a presidential order to allow for the investment of 401K retirement corpus in alternative assets including cryptocurrencies.
