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

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 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

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.