The Breakdown - As Circle Prepares to IPO, Crypto Deals Heat Up

Episode Date: June 4, 2025

May was a breakout month for crypto deals, with $3.5 billion in activity signaling a shift from stagnation to strategic consolidation. NLW breaks down the Robinhood–Bitstamp acquisition, Jump’s bet on tokenization, and Circle’s suddenly hot IPO—backed by BlackRock and poised to reshape the stablecoin landscape. Brought to you by: Grayscale offers more than 20 different crypto investment products. Explore the full suite at grayscale.com. Invest in your share of the future. Investing involves risk and possible loss of principal. To learn more, visit ⁠⁠Grayscale.com⁠⁠ -- ⁠⁠https://www.grayscale.com//?utm_source=blockworks&utm_medium=paid-other&utm_campaign=brand&utm_id=&utm_term=&utm_content=audio-thebreakdown)⁠ Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. What's going on, guys? It is Tuesday, June 3rd, and today we are talking about a big month for crypto deals. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, today's one of those days where we don't have one huge story. We have a bunch of stories that all add up to something of a trend.

And basically, the idea here is that May was a very good month for crypto deals. According to Blockworks research, the industry saw almost 600 million in deal activity. Now, dealmaking has been heavily depressed since mid-2020, as the industry caved in on itself, venture firms closed their wallets. It took until March of this year for crypto deals to come anywhere close to the frothy peak of 2022. which saw almost $4.5 billion in total dealmaking. In addition to the $600 million in venture, may also saw a ton of M&A

leading to a total of $3.5 billion. Now, it is certainly the case in crypto capital that this big volume is not representative of a large number of small venture bets, but instead is concentrated in a few larger deals. For example, last month's figures were almost entirely about Coinbase's $2.9 billion acquisition of Deribit, while the March numbers were dominated by Binance raising $2 billion from MGX.

In fact, overall, total deal count was actually down. May saw 61 fundraising announcements, which is the lowest number since February 2021. In fact, to some extent, when you start to dig into this, although the total dollar amounts are starting to get back to higher levels, it actually looks a bit more like consolidation than anything else. Speaking of M&A, Robin Hood completed their acquisition of Crypto Exchange BitStexam, the deal closed to $200 million paid entirely in cash. When it was proposed in June of last year, the deal was looking to be the largest crypto acquisition

during this cycle. Since then, of course, we've seen a number of deals come in at higher valuations, most notably Stripe paying over a billion dollars for Stablecoin Startup Bridge. Still, the BitStamp deal does demonstrate, I think, how much capital Robin Hood is committing to their global crypto expansion. BitStamp is one of the oldest crypto exchanges in the world. They were founded all the way back in 2011, a year prior to Coinbase and predating the Mount Gock's collapse of 2014. What this means practically is that they have some of the longest

standing customer relationships in the industry, with their 5,000 institutional clients providing the bulk of trading volume. The deal also nets Robin Hood over 50 licenses spread across the EU, UK, and Asia. Bidstamp from a revenue perspective is comparatively a minnow, only seeing about 95 million in revenue over the past year, as opposed to, of course, the larger players that are in the multi-billion dollar range. Still, the value for Robin Hood is immediate access to a wide range of global markets and mature crypto exchange infrastructure as an added bonus. Robin Hood's CEO Vlad Tenav tweeted, BitStamp is now a part of Robin Hood, adding a globally scaled crypto exchange and our first ever institutional crypto business. Our work is just beginning.

Now, the roadmap is pretty clear, with Robin Hood publicly discussing a plan to tokenize U.S. stocks in order to offer them to the world via crypto rails. Robin Hood Crypto General Manager Johan Kerrbrat told CNBC the firm isn't necessarily done with using acquisitions to expedite this plan. He said, if we can find a way to accelerate by at least 18 months or two years, and we have a lot of reasons to believe it's a great acquisition, it's something that we will definitely look at. Another piece of funding news that slipped under the radar last month, Jump Crypto has made a strategic investment in tokenization firm Securitize. The investment size was undisclosed,

and Securitize has never revealed their valuations. About all we really know about their fundraising history is a $47 million strategic investment from BlackRock in 2024. Securitize is currently the largest tokenization company by on-chain asset value with $4 billion. The bulk of that is $3 billion in the BlackRock tokenized Treasury Fund, but the platform now has a proven track record and successful test case. Jum's involvement is also interesting given the firm's history. During the last cycle, the crypto venture arm of the Goliath trading firm was one of the most active investors in the space. Yet the cycle ended very badly for Jum Crypto, which got tangled up in the collapse of Luna. Their president resigned after pleading the fifth in a deposition, and late last year, the firm agreed to pay

a $123 million SEC settlement to bury the matter. Since then, Jump has been making investments in infrastructure rather than splashing new tokens, but the firm still carries a pedigree for being a trendmaker in the industry. Coupled with their involvement with Solana infrastructure, it would not surprise me at all to see Jump make a bigger tokenization play later this year, lining up alongside BlackRock as a securitized partner. If you're taking a step back, it definitely seems like there are a lot of pieces coming together to make on-chain capital markets a reality. Now, maybe the big deal that people are focused on right now is the Circle IPO, which finally, after a huge, long, extended, protracted story seems to be careening towards actually happening. In fact, Circle is upsizing their

IPO after significant demand from Wall Street. The stable coin issuer is set to go public on Wednesday, but the deal terms have been pumped up by a rush of demand from Tradfai investors. Last week, as the roadshow came to a close, reports trickled in of strong interest from ARC invest in BlackRock. Arc is reportedly interested in $150 million allocation, while BlackRock is looking to take 10% of the offering. Bloomberg reported the offering had, quote, received orders for multiple times the number of shares available.

According to new SECFiling, Circle has upsized their offering and boosted their target price. The company will now offer 32 million shares at a price range of 27 to 28. That's a 40% increase in volume and a 12% to 20% to 20%. jump in the price from a range of 24 to 26. The price adjustment moves the fundraising prospects and valuation for the company significantly. The IPO was initially intended to raise around 600 million, but that figure is now closer to 900 million. The target valuation is now up from $6.7 billion when the IPO began coming together in late May to $7.2 billion now.

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Go to grayscale.com to explore their full suite of crypto investment products and invest in your share of the future. All told, the IPO has gone very quickly from questionable to looking like a hit. Circle is even creeping towards the $9 billion valuation they had initially targeted during their canceled SPAC deal of 2022. Back in May, you might remember when Circle first revealed their financials, the crypto community was a little surprised. The company disclosed they were paying around 50% of their revenues trade to Coinbase due to

a rev-sharing agreement. Circle also had generous payroll numbers that added further overhead. Profits dropped by 41% last year to just $155 million on $1.6 billion on revenue. Omar Conji of Dragonfly Capital wrote at the time, Nothing to love in the Circle IPO filing and no idea how it prices at $5 billion, gross margins getting crushed with distribution costs, core U.S. market being deregulated, and banks and financial institutions about to crash the private party. TLDR feels like a hail-Mary for some liquidity before the squad rolls in.

Of course, the squad that he's talking about is the set of U.S. banks that are anticipated to enter the stable coin market. Crypto analysts seem to have expected the financials to be similar to the absurdly profitable cash cow that is tether. The negative response even triggered talks of a buyout at around $5 billion from Coinbase and ripple. It appears, however, that Wall Street is seeing something very different. While crypto analysts seem to be pricing circle based on where it is now, Wall Street may

be looking towards the future. It's pretty clear at this point that the banking industry is coming to crash the party as soon as the ink is dry on stablecoin legislation. We've had a recent news that a consortium of the largest banks in the country are teaming up to issue a common stable coin. It was a reasonable take that Circle would really struggle to compete against Heather on one side and a JP Morgan-led banking industry on the other. However, the prospect of BlackRock coming in as an equity partner changes the math. If they take down 10% of the offering, BlackRock will own around 1.3% of the company. Not enough to be a major owner, but certainly enough to incentivize the mega asset

manager to grow Circle's distribution. And I think maybe this is the point. If some of those big banks, instead of deciding to work together, decide to bet on Circle as their horse, that could very quickly change the calculus. And this, by the way, is what Jeremy Aller, the CEO of Circle and the company I think have always been positioning for. Of course, BlackRock, we've seen make big moves in the crypto space before. Not only do they have their ETF and tokenized treasury fund, but as we just discussed, they also have an equity stake in tokenization platform securitize. BlackRock appears to be, in other words, putting together a team of strategic partners to build and grow a parallel financial market on crypto rails. The upsized Circle IPO could signal bets that

the Stablecoin issuer as part of the BlackRock ecosystem has big upside potential. And so to the extent that the crypto analysts were right that the financials of Circle at the time of their announcement weren't all that attractive, they failed to price in the potential of dramatic growth that could come from getting plugged into Wall Street. The bank consortium stablecoin will likely be aimed at consumer payments and remittances, while Circle has the potential to become the digital dollar for financial transactions, which is a much larger slice of the pie. That's also combined with the baseline assumption that stable coins are primed for insane levels of growth over the coming years. The U.S. Treasury has predicted that stablecoins

will become a $2 trillion market in short order, and even the pessimistic estimates are at $1 trillion. That's 4 to 8x growth in the short term, and could be biased towards Circle as the domestic U.S. option. Point being, of course, that Circle's financials start to look a whole lot better if revenue increases by multiples. Now, I will say, this is not the consensus on Twitter. Analyst paper Imperium wrote, The Circle IPO looks like a pretty poor deal at this valuation. I think people only buy into it because there's realistically no other way to get direct exposure to stablecoins as an investment thesis. I can't understand another reason why there'd be demand at this valuation. Suckers are buying this. On the flip side, Austin Heaton and the content manager at RisePaid tweeted,

Circle's IPO is a massive step for mainstream stablecoin adoption. Suddenly, USDC feels a lot more like real money for global payroll, right? Others are just observing the segment catch fire, with Mike Dutas of Sixth Man Ventures tweeting, Stablecoin's so hot, even Circle has a relentless bid right now. I think the other dimension of this, which people aren't really paying enough attention to, is that just in general, I think people have an extremely acute sense that the IPO window could come and go in a flash. I think right now any company that can pile in is piling in, and investors are there with

them because they're not sure this is going to last weeks, much less months. Look, though, at the end of the day, at this point, if you haven't seen BlackRock's power of self-fulfilling prophecy when it comes to sucking crypto infrastructure into Tradfai, you're just simply not paying attention. I think if we really do see BlackRock take 10% of the allocation, and especially if they go deeper in that relationship and any companies like that, the place of circle in this emerging stablecoin ecosystem could look very, very different than people are assuming today. Instead of tether on the one side and a J.P. Morgan consortium on the other, it's who cares about tether because Circle plus BlackRock and whatever other allies they have coming in are competing with the other banks for the biggest part of the

onshore market pie. Look, ultimately, I think it's better for everyone to have Wall Street betting on a crypto horse rather than just trying to outcompete us, especially leveraging their privilege regulatory position to do so. So I'm here for it. I'm going to be watching what happens on Wednesday closely, and of course I will be reporting it here. For now, that's going to do it for today's breakdown. Appreciate you listening, as always, and until next time, peace.