Renowned financial analyst and host Jim Cramer recently commented on the stock surge of stablecoin issuer Circle (CRCL, Financial), following its market debut. He recommended a cautious approach, suggesting investors wait for the stock price to cool before considering a purchase. Circle, the company behind USDC, a stablecoin pegged to the US dollar, is currently experiencing high stock valuations.
Circle's shares were priced at $31 during its IPO and surged to $69, a 168% increase. Cramer likened stablecoins to casino chips in the crypto world, useful for exchanging Bitcoin or Ethereum while maintaining stable value. He highlighted USDC's transparency and fiat backing as advantages over competitors like Tether.
Despite Circle's robust operations and positive financial performance, its valuation skyrocketed from $5.5 billion to around $25 billion within weeks, making it challenging to justify buying at current levels. Cramer acknowledged the company's ties to the volatile crypto ecosystem and advised investors to be patient for better buying opportunities.
He also warned about the overall craziness in the IPO market, citing CoreWeave (CRWV), backed by NVIDIA (NVDA), as another example of a stock with excessive gains after its recent IPO.
