TradFi embraces crypto, but tokens are still waiting

A stablecoin issuer going public at this scale would’ve seemed impossible – until now. Circle’s recent IPO marked a major turning point. Once valued at US$7 billion, it’s now trading well above US$40 billion, and briefly topped US$70 billion. That’s a staggering premium for a stablecoin issuer.

A few years ago, this would have been unthinkable. Traditional finance (TradFi) has clearly warmed up to the stablecoin use case. Circle, with its U.S. base, regulatory posture, and strategic partnerships, provides a more “investor-friendly” path into the space than many decentralised alternatives.

Circle’s success signals a broader shift: mainstream investors are finally embracing crypto, but through public market structures, not tokens.

As legislation like the GENIUS Act advances in the U.S., regulated stablecoins are gaining traction as part of the formal financial system. This clarity gives compliant issuers an edge over less transparent competitors like Tether.

Tokens still waiting for their moment

The technology behind crypto is being embraced. Platforms like Robinhood are even launching tokenised equities. But tokens themselves? Still waiting in the wings.

The logic was that a rising tide – Circle’s IPO, TradFi partnerships, regulatory wins – would lift decentralised finance (DeFi) and stablecoin-aligned tokens too. So far, that hasn’t happened.

Compare this with Maker, a decentralised stablecoin issuer. Maker generates strong earnings – around US$90 million annually – yet its market cap sits at roughly US$1.8 billion. While both operate in similar domains, the market is assigning a far higher premium to companies like Circle.

It’s clear investors favour regulated, transparent, equity-based exposure over decentralised alternatives.

Key takeaways for investors

What we’re seeing isn’t just about Circle. It’s about what the market is telling us:

• There is a liquidity premium in being able to buy a regulated entity.
• U.S.-based, public, transparent entity is much more favourable than a DAO pushing decentralized governance.
• Decentralised stables like Maker’s are possibly not the winning leg of this narrative and may even be negatively impacted by legislation.
• Equities are the vehicle of choice, especially as crypto treasury firms gain traction in traditional markets.

So, interestingly, and somewhat painfully, the growth and acceptance that crypto has been begging for is happening, but just not quite how the industry expected. It's happening under the roof of TradFi with tokens being left behind.

It’s a reminder that growth doesn’t always arrive in the form the industry expects. For investors, it’s a trend worth paying attention to.

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