Recent crypto IPOs have been a wipeout for most investors. Will the next wave be better?

Most recently listed crypto companies have sharply underperformed: BitGo, Bullish and eToro are down 55%-65%, Gemini has fallen nearly 90% and its market cap has dropped from $3.3B to about $500M, while American Bitcoin is down more than 93%. Circle is near its listing price after a large opening-day gain, and Hyperliquid Strategies is up more than 200%; the article attributes many laggards’ performance to frothy IPO conditions and competition in services with limited differentiation. It urges caution toward upcoming crypto IPOs, while noting that scale, strong products or distinctive business models may help some companies succeed.

Analysis

The key distinction is not “crypto versus traditional finance,” but whether a company has defensible distribution and differentiated economics. Commodity custody and trading face a two-sided squeeze: Coinbase and large financial/fintech platforms can compete on trust, breadth, and customer acquisition, while price competition limits smaller firms’ ability to convert activity into durable margins. Further IPO supply could intensify this pressure by absorbing investor risk budget and making public-market valuations a tougher financing benchmark for the whole cohort.

Circle is a different exposure, but not a blanket sector proxy: its economics are linked to stablecoin adoption and distribution, with sensitivity to interest rates and the terms of partner relationships. Its relative strength should not be extrapolated without evidence that usage and monetization are expanding. Hyperliquid Strategies’ outperformance may reflect a distinct treasury/token exposure, not proof that operating crypto businesses have cleared the public-market test.

Near term, IPO filings, pricing and post-listing supply can drive sentiment more than operating results; over 1–3 months, watch reported customer growth, revenue mix, take rates and guidance from the listed cohort. Over 6–18 months, consolidation and competitive displacement are plausible, but not assured. The thesis weakens if smaller platforms demonstrate sustained customer and revenue growth without sacrificing economics, or if major platforms retreat from competing. For Circle, weaker stablecoin adoption or adverse rate/distribution changes would challenge the differentiated case.

Key Decisions for Investors

• Prefer a relative-value expression over a broad crypto-sector short: consider a volatility-adjusted long CRCL against a basket short of BLSH, BTGO, GEMI and ETOR. Keep the position modest and reassess after earnings; the short leg has squeeze risk, especially after large declines. Exit or reduce if the smaller firms show improving customer growth and economics, or if Circle’s adoption/monetization stalls.
• Do not chase CRCL solely on relative performance. Add only after confirming in company disclosures that stablecoin activity is translating into durable monetization; monitor rate sensitivity and distribution-partner concentration as the principal risks.
• Treat FIGR and GLXY as separate business exposures rather than automatic members of a failing-IPO basket. Require evidence on lending economics for Figure and operating-segment performance for Galaxy before taking a directional position; the supplied information is insufficient to establish attractive entry levels.
• For prospective listings, remain on watch rather than pre-committing: review audited revenue mix, customer concentration, cash generation, dilution and lockup/float terms before pricing. A weak offering or further post-listing breakdown would reinforce the valuation-discipline thesis; improving fundamentals and resilient aftermarket trading would falsify it.