Trusted

Analysts Explain Why Circle’s IPO Could Be a Sell Signal for Bitcoin

2 mins
Updated by Ann Maria Shibu
Join our Trading Community on Telegram

In Brief

  • Circle’s IPO on June 5, echoes past crypto market tops, like Coinbase’s IPO, which preceded Bitcoin’s 54% drop.
  • Historical data links major crypto milestones—IPOs, ETFs, and futures launches—to temporary peaks followed by sharp corrections.
  • Critics argue Circle's IPO mainly benefits insiders, while broader market risks like geopolitical tensions and profit-taking add pressure.
  • promo

The crypto market has been buzzing with news about the Initial Public Offering (IPO) of Circle, the company behind the USDC stablecoin. However, many analysts and investors question whether this event could act as a sell signal for Bitcoin.

Based on analysis and opinions from the community, there are compelling reasons to believe that Circle’s IPO could mark a short-term peak for Bitcoin and usher in a period of high volatility.

Why Circle’s IPO Is Raising Red Flags in the Crypto Market

According to Ignas, a well-known analyst on X and co-founder of Pink Brains, Coinbase’s IPO on April 14, 2021, marked a local top for Bitcoin.

Following that event, Bitcoin’s price dropped by 54% over the next three months. It later rebounded and rose by about 130%.

Bitcoin Peaked Around The Time of Coinbase’s IPO. Source: Ignas
Bitcoin Peaked Around The Time of Coinbase’s IPO. Source: Ignas on X

The chart shared by Ignas clearly shows the correlation between the Coinbase IPO and a market reversal. Bitcoin reached a peak near $65,000 before plunging.

This historical data raises concerns that Circle’s IPO might follow a similar pattern.

Additionally, research from 10x Research also shows that major events like IPOs, the launch of Bitcoin ETFs, and Bitcoin futures on CME are often associated with significant market tops.

Bitcoin Price And Major Market Events. Source: 10x Research
Bitcoin Price And Major Market Events. Source: 10x Research

These events usually draw attention from both institutional and retail investors. As capital flows into the market, prices surge. But once a peak is reached, profit-taking and price corrections often follow, leading to steep declines in Bitcoin’s value.

In this context, Circle’s IPO—considered a major milestone in the crypto industry—could be another warning signal.

“Circle IPO is a trap for retail. Americans don’t need USDC. They already have USD. As for foreigners, they already have USDT and others. This IPO is great for insiders but not for retail,” investor Bernard Beckett commented.

In addition to Circle’s IPO, 10x Research points out several recent developments that could negatively impact Bitcoin’s price. These include a public dispute between Elon Musk and Donald Trump, uncertainty surrounding US trade policy, long-term holders cashing out more profits, and rumors suggesting that China may impose a ban on Bitcoin ownership.

Despite these concerns, the crypto community on X holds mixed views. Some believe this is a new cycle marked by growing acceptance of cryptocurrency by governments and financial institutions. Therefore, history might not repeat itself.

For example, some argue that Circle is fundamentally different from Coinbase because of USDC’s stable business model. They believe the IPO could serve as a catalyst for long-term growth.

On the other hand, many traders see the IPO as a “liquidity exit”—a chance for major investors to cash out and lock in profits after a price surge.

Beyond Circle, the IPO wave is spreading across the crypto industry. Gemini, the exchange run by the Winklevoss twins, has quietly filed for an IPO in the US. Meanwhile, rumors are swirling that Tether—the world’s largest stablecoin issuer—may also be preparing to go public.

Top crypto platforms in the US
Figure Markets Figure Markets Explore
Coinbase Coinbase Explore
Plus500 Plus500 Explore
Arkham Arkham Explore
Moonacy Moonacy Explore
Top crypto platforms in the US
Figure Markets Figure Markets Explore
Coinbase Coinbase Explore
Plus500 Plus500 Explore
Arkham Arkham Explore
Moonacy Moonacy Explore

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

tung-nobi.jpeg
Nhat Hoang
Nhat Hoang is a journalist at BeInCrypto who writes about macroeconomic events, crypto market trends, altcoins, and meme coins. With experience tracking and observing the market since 2018, he is able to grasp the stories in the market and express them in an accessible way to new investors. He graduated with a bachelor’s degree in Japanese from Ho Chi Minh City University of Pedagogy.
READ FULL BIO
Sponsored
Sponsored