Crypto stablecoin company Circle Internet Group rose more than 40 percent on Friday after an IPO on the New York Stock Exchange a day earlier that saw it raise $1.1 billion (£810m) amidst heavy demand.

The firm’s stock price on Friday rose to over $120, more than quadruple its $31 initial offer price, valuing it at about $23bn or about $30bn on a fully diluted basis accounting for employee stock options, restricted share units and warrants.

On the day of its IPO, trading in Circle shares was halted several times due to volatility and their price rose over $100 before closing at $83.23.

IPO surge

It was the largest first-day rise for a US IPO raising more than $100m since Sono Group in 2021, and indicated a renewed appetite for new offerings following a period of uncertainty driven by fears over rising world trade barriers.

The deal, which was enlarged twice amid strong demand and was priced above the marketed range, also indicates a growing mainstream acceptance of stablecoins, or cryptocurrencies that are pegged to the value of a fiat currency such as the US dollar and are backed by reserves.

Stablecoins are due to be regulated by legislation currently before Congress, which could lead to their wider adoption by financial institutions.

Some of Wall Street’s largest banks are also considering issuing their own stablecoin, the Wall Street Journal reported last month.

Circle’s USDC is the second largest stablecoin with about 29 percent of the market as of the end of March, according to Circle filings citing data from CoinMarketCap.

The White House has signalled its intent to promote the broader use of cryptocurrencies and stablecoins appear as a relatively low-risk use case for the technology, contrasting to the volatility typical of Bitcoin and other major crypto tokens.

Crypto volatility

Circle’s strong debut spurred crypto exchange Gemini to confidentially file for a US IPO on Friday, the company said.

The cryptocurrency sector continues to be considered high-risk, and companies in the industry have held off filing for IPOs in recent months amidst broader economic volatility.

Stablecoins carry similar risks to other cryptocurrencies, with a major offering TerraUSD abruptly losing nearly all of its value after parent company Terraform Labs went bankrupt in 2022.

Stablecoins Tether and Circle itself have been hit by volatility related to shocks in the broader crypto market in recent years.

The tokens also face the same risk of theft as other digital coins. USDC was part of a stash of $615m stolen from gaming-focused blockchain Ronin Network in March 2022, for instance.