June 5, 2025 marked a milestone as stablecoin issuer Circle officially debuted on the New York Stock Exchange under the ticker "CRCL." In just two trading days, its share price soared from the IPO price of $31 to $107.70, a staggering 247% gain, with intraday highs reaching around $123.50. The buzz surrounding the "world’s first stablecoin stock" has reignited a long-standing question for investors: Which is more profitable—getting in at the Pre-IPO or IPO stage?
Examining the Return Gap Between Pre-IPO and IPO Through Circle
Circle’s listing stands out as one of the most talked-about IPOs of 2025. The offering raised $1.1 billion and was oversubscribed by more than 25 times. However, Wall Street investment banks dramatically mispriced Circle’s valuation—the underwriters set the IPO price at $31 per share, but it closed its first day at $82.84, a 167% jump. At the closing price, the issuer left about $1.72 billion in potential capital on the table. This pricing gap ranks as the seventh largest IPO underpricing in nearly four decades, just behind giants like Visa and Airbnb.
Beyond the pricing controversy, what’s even more noteworthy for investors is the uneven distribution of returns. Institutions that invested in Circle as early as 2018 reaped several-fold or even double-digit multiples on their capital as the company went public. In contrast, retail investors who rushed in on IPO day to ride the "first stablecoin stock" wave faced a dramatically higher entry cost than early backers. As of June 9, Circle’s market cap had climbed to about $24 billion, with a price-to-earnings ratio approaching 150x. Clearly, the most lucrative window for returns occurred just before the IPO bell rang.
Not an Isolated Case: 2025 IPOs Reinforce the Same Pattern
Looking beyond Circle, other high-profile IPOs in 2025 offer further evidence of this trend.
Design software company Figma, after its acquisition by Adobe fell through due to antitrust concerns, went public independently in 2025. Its IPO was priced at $33 per share, but closed the first day at $115.50—a 250% single-day surge—pushing its market cap close to $68 billion. Crypto exchange Bullish also posted a stunning 290% gain on its debut. These cases consistently demonstrate a dramatic "valuation jump" on IPO day. For ordinary investors who can’t access Pre-IPO rounds, this leap in value—and the outsized returns it brings—is essentially out of reach.
Market-wide data quantifies this pattern. According to S&P Global, the average first-day return for US IPOs in the first half of 2025 reached 15.3%, significantly higher than the 10.5% seen in the same period of 2024. The tech sector stood out, with post-IPO trading prices averaging over 140% above the offering price; Circle alone has climbed 485% since its IPO. So far in 2025, the US IPO market has seen 168 deals, raising nearly $28.9 billion—the highest since 2021.
Meanwhile, a research report on emerging company IPOs notes that Pre-IPO investors averaged a 43% return, while IPO-stage investors saw profits in only 36% of cases, and Post-IPO investors dropped further to 32%. The return gradient across these three phases is clear—the earlier the entry, the higher the win rate. All this data points to a clear conclusion: the Pre-IPO stage is not just a zone of valuation transition, but the primary source of outsized gains.
Why Are Pre-IPO Returns Higher?
To understand the return gap between Pre-IPO and IPO, we need to revisit the logic behind valuation.
In traditional IPO processes, underwriters typically adopt a "conservative pricing" strategy, leaving room for a price pop on the first day of trading. While this approach helps ensure a successful offering, it also creates a gap between the IPO price and fair market value—precisely the window of profit that Pre-IPO investors capture. The $1.72 billion underpricing in Circle’s IPO is a striking example of this phenomenon.
A broader perspective comes from comparing private and public markets over the long term. In the past 25 years, the private market has generated roughly three times the total value of the public equity markets. Many top companies raise billions through multiple private funding rounds, delaying or even forgoing an IPO. For instance, OpenAI raised $6.6 billion from Microsoft, SoftBank, and others in October 2024, followed by a $40 billion round in March 2025—one of the largest private raises in history. This means that much of the growth premium is realized and distributed before the IPO ever happens.
Traditional Pre-IPO investing also comes with three major barriers: minimum investments often run into hundreds of thousands or even millions of dollars, putting them out of reach for most individuals; capital is usually locked up for years, with very limited liquidity; and top-tier shares in companies like SpaceX, OpenAI, and ByteDance circulate almost exclusively among elite institutions. These barriers create a "high-return, low-access" closed market, keeping Pre-IPO gains largely confined to a select few.
Risks of the IPO Stage: Not a Guaranteed Win
It’s important to note that the IPO stage is far from a guaranteed win.
While the US IPO market performed strongly in the first half of 2025, global IPO activity remained sluggish overall. According to the London Stock Exchange, as of mid-June, global IPO fundraising was down about 9.3% year-over-year to $44.3 billion, the lowest in nine years. Even in the active US market, investment banks frequently misjudged valuations for crypto and tech firms—Bybit’s report highlighted how Circle’s IPO exposed the limitations of traditional Wall Street valuation models in the crypto sector.
At the same time, the competitive landscape in crypto continues to evolve. Bybit notes that companies like Fireblocks and Chainalysis are seeking multi-billion dollar IPO valuations in areas from decentralized finance (DeFi) to security. This means windows of opportunity still exist, but assessing company fundamentals, sector competition, and macro policy trends is more critical than ever.
Evolution of the Pre-IPO Track: Crypto’s Breakthrough
Notably, the crypto industry is uniquely reshaping access to Pre-IPO investing.
In June 2025, online brokerage giant Robinhood launched "stock tokens" for unlisted unicorns like OpenAI and SpaceX in the European market. While OpenAI quickly clarified that these tokens do not represent actual company equity, the move sent a clear signal—tokenization of primary market assets is entering mainstream finance.
Currently, there are three main models for Pre-IPO asset tokenization: dedicated Pre-IPO trading platforms (such as PreStocks, which indirectly holds company shares via SPV structures and maps them 1:1 to on-chain tokens); crypto exchanges opening Pre-IPO channels (leveraging compliance partnerships and platform traffic); and broader tokenized equity under the RWA (Real World Asset) framework. For example, PreStocks has seen total Pre-IPO asset trading volume approach $920 million, with nearly 17,000 users, covering hot equity targets like SpaceX, Kalshi, OpenAI, and Anthropic.
On the exchange front, the industry is moving rapidly. In July 2025, Gate launched the xStocks trading section, becoming the first globally to offer perpetual contracts for tokenized stocks, breaking down the traditional boundaries of financial markets. Gate subsequently partnered with Ondo Global Markets to launch the Ondo section. As of September 2025, the platform offered trading for 26 tokenized stocks and ETFs, covering major tech stocks and popular index funds. Investors could participate directly using USDT, drastically lowering the barrier for global participation in tokenized equity assets.
The underlying logic behind these innovations is consistent: blockchain technology is breaking down the capital requirements, liquidity constraints, and information asymmetry of traditional Pre-IPO investing, giving more ordinary investors a chance to get in early with companies shaping the future.
Conclusion
In summary, both Pre-IPO and IPO investment stages have their pros and cons, but from a return-maximization perspective, the Pre-IPO stage clearly offers more attractive returns. The latest data from 2025 shows Pre-IPO investors averaging a 43% return, well above the 36% for IPO-stage investors and 32% for Post-IPO participants. The massive first-day pops of over 200% seen in Circle, Figma, and Bullish’s IPOs fundamentally reflect a one-time realization of the valuation gap between Pre-IPO and public market prices.
However, investment decisions are never one-dimensional. The higher returns of the Pre-IPO stage come with greater uncertainty—illiquidity in private markets, regulatory and compliance risks, and the company’s control over valuation are all significant variables. In contrast, while the IPO stage offers narrower returns, it brings stronger compliance, greater transparency, and much higher liquidity.
For ordinary investors, the crypto industry’s tokenization innovations are gradually breaking down the three major barriers of traditional Pre-IPO investing, offering a new path that balances return potential with accessibility. Regardless of which stage you choose to enter, understanding the risk-return profile of each phase and aligning your decisions with your capital and risk tolerance is the key to long-term success.
