Original Title: Making 400% on Circle; Why we Aped $CRCL before IPO
Original Author: @DiogenesCasares
Original Translation: zhouzhou, BlockBeats
Editor's Note: We positioned ourselves early when Circle was undervalued, betting on the stablecoin narrative and institutional demand, and have now achieved a 400% return. Even though the financials are not impressive, the technology and compliance moat are solid, and there is still potential for the future. We are currently assisting clients in gradually realizing their profits.
The following is the original content (reorganized for better readability):
Almost a year ago, we @PatagonLLC began advising clients to consider buying Circle at a price equivalent to $20-30 per share (adjusted for pre-split pricing).
At that time, the valuation was about $3 billion, and we also invested real money ourselves. We trade in the secondary market and usually do not proactively recommend projects to clients, but rather help them find targets they are interested in.
We only reach out to clients when we genuinely believe in a particular trade. Even when most crypto Twitter users were still focused on Circle's lackluster financial data, comparing it to Tether, or claiming it had no moat and would eventually be acquired by Coinbase, we firmly advised clients to buy for the following reasons:
Relative Value is Very Attractive
Even if Circle is ultimately acquired, we believe its moats in technology, distribution channels, compliance licenses, and team are sufficient to support a valuation exceeding $6 billion. At that time, the price was only $3 billion, which is equivalent to a very stable "floor price." Even if the IPO ultimately fails, clients still have a high likelihood of securing profits.
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 crypto funds in the BVI/Cayman Islands, but real, strictly regulated U.S. institutions and funds. These institutions can only invest through the stock market. Investing in Circle is essentially betting on traditional institutions' desire for exposure to stablecoins. Based on our interactions with these institutions, we believe their demand is very high.
The Truth Beneath the Surface
Although the surface financial data may not look good, many people do not know that many of Circle's agreements can be renegotiated. I personally have a very positive outlook on its new chain expansion strategy—deploying USDC on new chains and sharing part of the profits. This model is highly scalable and will help it continue to expand its market share in the future.
What's Next?
We are currently helping clients lock in profits (the average return to date is about 400%). Most of the value of this trade has already been realized. Our own positions will also gradually exit in the coming months to free up funds for new trading opportunities—after all, our internal return threshold is quite high.
But I believe Circle may have more "hidden skills" in the future that will exceed market expectations.
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