⭕ Full Circle

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There’s a lot to digest in Circle’s S-1, and we’ll get into other parts of it in just a bit, but I was particularly intrigued by Circle’s Reserve Fund with BlackRock.

“As of December 31, 2024, we held approximately 85% of USDC reserves in the Circle Reserve Fund, a government money market fund … as amended, managed by BlackRock, one of the world’s largest asset managers, and available only to us,” the filing said.

Oh! And we got a better look at the executive compensation, an add-on I always like to look at in these docs. Nothing too crazy here, if I’m being honest, but a fun look on the inside nonetheless.

Anyway, if you need me, I’ll be combing through the S-1 a few more times for more interesting nuggets.

Meanwhile:

• Bitcoin’s up ever so slightly to $84,000 as the markets await news about President Trump’s tariffs. 

• Circle’s adjusted EBITDA in 2024 came out to $284 million, according to its S-1. 

• Total stablecoin volume has topped $227 billion, per rwa. xyz. 

🖨️ Printing money

I’ve got a dose of optimistic news for you this morning: From a venture capital perspective, the first quarter wasn’t so bad!

Preliminary data from PitchBook suggests that the quarter saw roughly $4.5 billion in VC spending, with half of that coming from Binance’s deal with Abu Dhabi’s MGX. To put that figure into context, we saw a little over $2 billion per quarter last year. 

If we continue at this pace — and I know it’s early to say this — we could see spending hit $18 billion. That number is still nowhere near the $33 billion raised back in 2021, but it shows that the sector’s bouncing back, and it’s not looking frothy. 

Back in December, PitchBook’s Robert Le told us he wouldn’t be surprised if we saw “multiple” $5 billion quarters and, clearly, we’re not too far off. 

He told me that part of the momentum is coming from the larger deals, $100 million or bigger, that we haven’t seen too much of so far this cycle. 

Right now the average deal size in March sits at roughly $60 million, though — looking at the chart above — that’s clearly a jump from the deal sizes we saw last year.

“I think as the mega funds come back to market, we're going to expect to see a lot of those larger deals get funded, and that's going to really [show in the] amount of venture capital dollars being invested,” he said.

There’s preliminary evidence to support that, too. Le said he’s heard that Katie Haun’s not having a hard time raising $1 billion for two new funds, which was first reported by Fortune. The interest shows that limited partners are looking to invest in some of the so-called mega funds. 

“Overall sentiment” is good for crypto VCs across the board, even emerging partners focused on seed or pre-seed funding. 

Speaking of those smaller rounds, we might be seeing more of them at the moment, but Le thinks that larger deals will pick up as companies scale; it’s just a matter of where we are in the cycle. Per TIE data, the seed stage round is currently the most active round type.

It should come as absolutely no surprise that Le expects projects focused on institutions to garner the most interest right now. 

One thing that’s “great for startups in this space is that these institutions are more likely to partner or buy rather than build internally.” Le expects this to drive a “large chunk of venture funding” going forward. 

On the flipside, Le doesn’t think we’re going to see a flock to app-layer spending — anything that serves retail, he clarified. 

“The general view is that retail hasn’t come back to the market,” though Le admitted that mindset might be “short-term thinking.” The “holy grail” for crypto is to integrate retail users who are using crypto apps with real-world value. They’re not going to come in just for the tokens and some may not even interact with tokens. 

In fact, social media projects could potentially be the winners in the sector. Look at Farcaster for example. Le said the project’s doing an “okay job,” but he wants to see them focus on a larger audience outside of the crypto native crowd. 

Given that they raised $150 million last year, he thinks they have the capital to start winning over a broader audience. 

Let’s start onboarding.

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• The SEC and Gemini want to hit pause on their ongoing legal battle. 

• Can the creditors please stand up? That’s BlockFi’s most recent request, as it preps for bankruptcy distributions. 

• VanEck’s eyeing a potential BNB ETF, per a Delaware filing.

🎭 Public debut

We finally have Circle’s S-1 and, honestly, it’s just as juicy as I had hoped. 

It looks like Circle, which plans to list on the New York Stock Exchange under ticker CRCL, is aiming for a valuation of around $4 billion to $5 billion. 

Some folks — including Le — have noted that it’s a rather low valuation. In Le’s case, he thinks it could be purposefully low.

Coinbase, when it went public in 2021, kicked off trading with a nearly $100 billion valuation. Obviously, the two companies, while very intertwined, have different business models, so don’t get too excited about Circle getting anywhere near those levels. 

Especially if stablecoin legislation is passed. 

But the road show will be the real test for the stablecoin issuer, Le told me.

“My guess is, if it all goes well, that valuation should push up much higher toward the end of their road show. And then that would be a positive signal,” especially if interest is higher than anticipated. 

As Wyatt Lonergan of VanEck Ventures noted, the issuer will face questions around the market evolution and what could possibly be the beginning of the stablecoin wars, which would see everyone, including big banks, look to issue their own stablecoins. 

It’ll “come down to how the market evolves and begins using stablecoins at scale. If that stable is USDC then they’ll get a strong multiple, even as their take rate declines because the potential markets they can grow into are massive.”

But on the VC front (to carry that theme here) strong demand for the listing could open up a new exit path for crypto investments and that would be a “shift that might encourage additional capital inflows into crypto startups.”

Circle could — and so far looks to be — just the start of a crypto IPO boom, with others like Kraken, Chainalysis and Fireblocks in the wings. Add in the pick up in M&A activity and the liquidity routes are wide open for a lot of folks.

It’s a builders market. It will always be a builders market. 

Permissionless IV is for the ones deep in the code — building infra, launching new systems, and reshaping how this space runs.

🎤 Speaker apps are open — got something that matters? Say it on stage.

💻 Hackathon is live — $100K+ in bounties. Builders get in free.

June 22–26 | Brooklyn

On our minds: Coinbase’s stock