Circle IPO Makes 400%, Why Should I All In $CRCL?

Original title: Making 400% on Circle; Why we Aped $CRCL before IPO
Original author: @DiogenesCasares
Original compilation: zhouzhou, BlockBeats

Editor's brief: We positioned ahead of Circle's low valuation, betting on the stablecoin narrative and institutional demand, and are now making a 400% gain. Even if the financial situation is not impressive, the technology and compliance moat is solid, and there is still potential for the future. We are already assisting our clients to realise their earnings gradually.

The following is the original content (the original content has been edited for ease of reading and comprehension):

Almost a year ago, @PatagonLLC we began advising our clients to consider buying Circle at the equivalent of $20-$30 per share (adjusted price before stock split) almost a year ago.

At the time, it was valued at about $3 billion, and we were involved with real money ourselves. We trade in the secondary market, and we usually don't actively recommend projects to our clients, but help them find the targets they are interested in.

Only when we are really optimistic about a certain deal, will we take the initiative to talk to the customer. And even when most crypto Twitter users are still looking at Circle's under-stellar financial data, comparing it to Tether, or saying that it has no moat and will definitely be acquired by Coinbase, we strongly recommend that customers buy for the following reasons:

The relative value is very cost-effective

Even if Circle is eventually acquired, we believe its moat in terms of technology, distribution channels, compliance licenses, and teams will be enough to support a valuation of more than $6 billion. At that time, the price was only $3 billion, which is equivalent to a very stable "floor price". Even if the IPO fails, there is a good chance that the client will be able to make a solid profit.

The stablecoin narrative is too strong

Denying the narrative value of stablecoins is as unrealistic as denying gravity. This narrative is particularly appealing to institutions – not those BVI/Cayman crypto funds, but really heavily regulated US institutions and funds. And these institutions can only invest through the stock market. Investing in Circle is really betting on the desire of traditional institutions for stablecoin exposure. Combined with our engagement with these agencies, we believe that their demand is very high.

The truth beneath the surface

While the financial numbers may not look good on the surface, many people don't know that many of Circle's agreements are renegotiable. Personally, I'm also very bullish on its new chain expansion strategy - by deploying USDC on the new chain and sharing a portion of the revenue. This model is highly scalable and will help it continue to grow its market share in the future.

What's next?

Now we're helping our clients lock in earnings (the average return so far is around 400%). Most of the value of the deal has now been realised. We will also be exiting our own positions in the coming months to free up funds for new trading opportunities – given our internal high threshold for returns.

But I think there may be more "hidden skills" in the future that will exceed market expectations.

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