2 days ago
Circle's Wild IPO Sparks ETF Rush Betting on the Hot Stablecoin Stock
(Bloomberg) -- Wall Street's ETF machine kicked into high gear just hours after Circle Internet Group Inc. went public, riding the frenzied initial public offering of the stablecoin giant as crypto technologies enter mainstream finance.
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At least three issuers rushed to file related exchange-traded funds following Circle's white-hot Thursday debut. The firm — issuer of USDC, the second-largest stablecoin — saw its shares triple shortly after trading began, reviving animal spirits across an IPO-starved market.
Filings for the Bitwise CRCL Option Income Strategy ETF, ProShares Ultra CRCL ETF and T-Rex 2x Long CRCL Daily Target ETF landed with the US Securities and Exchange Commission Friday and Monday. REX Financial's registration replaced an earlier ETF prospectus, effectively shortening the timeline for a potential approval.
Bitwise Asset Management Inc.'s ETF seeks to employ a covered call strategy — which enhances the income of the underlying assets — while the versions from ProShares Advisors LLC and REX Financial offer amplified bets on the stock's performance by using derivatives to deliver two times its daily performance.
With risk sentiment rekindled, funds tied to speculative assets — including leveraged or inverse bets — are increasingly popular. The rapid-fire pace at which ETF product teams are moving to cash in on the momentum of single stocks exemplifies the intense competition in the $11 trillion ETF arena in the US which has been flooded with more than 4,200 products. Of those, nearly 80 funds track digital-assets in some form, data compiled by Bloomberg show.
'It's an alignment of the stars,' said Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence. 'It's a crypto company, so that's high demand, it's leveraged and it's a market hungry for IPOs.'
Shares of the New York-based firm have soared more than 270% across their first three trading sessions, marking the most high-profile crypto equity debut since Coinbase Global Inc.'s direct listing in 2021. Its $1.1 billion IPO lands amid renewed bullishness for digital assets — fueled in part by a regulatory sea change under President Donald Trump, whose administration has signaled a dramatically friendlier stance toward crypto compared to his predecessor.
That shift has emboldened both issuers and traders alike. Single-stock ETFs — many of them leveraged or using options overlays — now account for a record 16% of all new funds launched in 2025, per Bloomberg Intelligence. More than 15 firms are now competing in the space, most of them targeting high-conviction retail traders seeking fast, directional exposure.
The ETFs being proposed are also increasingly aggressive: the average volatility of their underlying assets is nearly twice that of those for already approved products, according to BI data.
Critical Vote
Evidence of the mutability of the crypto crowd emerged on Tuesday as Circle shares fell as much as 10%. If the losses persist it will be the first daily slump since last week's IPO.
Circle's dip comes ahead of potentially transformative stablecoin legislation, which is up for a crucial vote Wednesday. The bill is supported by the crypto industry and Trump, whose family's World Liberty Financial project has issued its own stablecoin. Stablecoins are crypto tokens typically designed to be pegged to the value of the US dollar or another traditional currency.
Circle's role as the issuer of USDC — a stablecoin with around 29% market share — means the stock is not a pure crypto play. Its business model leans heavily on yield from US Treasuries and other safe assets that back its token. That sets it apart from revenue models like Coinbase, which rely on transaction fees, and has helped fuel investor interest.
Retail trading behemoth Cathie Wood's ARK Investment Management, bought over 3 million shares of Circle for its flagship ETF (ticker ARKK) on Thursday, according to its website, placing it among the fund's top 10 largest holdings. The firm bought additional shares for its other funds.
The Circle frenzy could set the tone for a broader wave of crypto IPOs. Gemini, the exchange run by the Winklevoss twins, has filed confidentially for a listing this year, while has staffed up with veteran talent to fast-track its plan to go public.
'This is the new trend. As certain companies IPO, we are seeing ETFs, and more specifically some levered ETFs, sprout to take advantage of any tailwinds,' said Mohit Bajaj, director of ETFs at WallachBeth Capital. Following Circle's huge run, 'some ETF issuers are trying to create a product based on it — in hopes that it will have success too.'
--With assistance from Vildana Hajric.
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