Circle Internet Financial’s privately held stock is trading on the secondary market at prices suggesting a valuation between $5 billion and $5.25 billion. This comes as the stablecoin issuer prepares for an anticipated initial public offering (IPO), according to sources familiar with the matter.

Strategic Share Trades Precede IPO

The issuer of USDC, the second-largest stablecoin by market capitalization, is facilitating limited secondary market trading of its shares. These transactions are selective, occurring only in specific situations, primarily involving early-stage investors seeking liquidity and Circle employees looking to monetize stock options pre-IPO, according to insider information.

Read more: Circle Secures First Stablecoin License Under EU’s MiCA Regulations

Valuation Floor Established

Notably, Circle has set a floor for these trades, refusing to permit transactions below a $5 billion valuation. Despite multiple requests for comment, Circle has remained silent on these developments.

Previous Valuation and Market Conditions

In 2022, Circle’s valuation soared to approximately $9 billion as it sought to go public via a special purpose acquisition company (SPAC) merger with Concord Acquisition Corp. However, the proposed merger was mutually terminated in December 2022. The SEC’s delayed approval and the collapse of FTX, along with the ensuing crypto winter, were significant factors in this decision.

Market Dynamics and Investor Sentiment

One source emphasized that the current secondary market is significantly depressed, attributing this to a high number of investors in urgent need of liquidity, leading to sales at suboptimal prices. Despite this, the difference between the 2022 valuation and the current secondary market implied valuation should not be a cause for investor concern.

Growth Indicators and Future Plans

In a January report titled “State of the USDC Economy,” Circle revealed a 59% increase in USDC wallets with at least $10, reaching approximately 2.7 million. Additionally, the number of transactions in 2023 had totaled 595 million by the end of November.

Circle filed a confidential draft S-1 document with the SEC in January, marking its initial step towards going public. Details regarding the number of shares to be offered and the price range remain undisclosed, and the precise timing of the IPO is yet to be determined.

Relocation for Legal Purposes

Bloomberg reported in May that Circle plans to re-domicile to the United States ahead of its IPO. The company has initiated the necessary paperwork to transition its legal base from Ireland to the U.S.