Shares of Circle Internet Corp., the stablecoin company that went public last week and soared nearly 170% on its debut day. Circle rose about 8% in Wednesday trading at about $114 a share, Circle is still more than three times above its initial public offering price of $31. Can you say retail trading frenzy?

Steve Sosnick, chief strategist at Interactive Brokers, told Barron’s on Tuesday that Circle was the fourth-most actively traded stock on its platform in the past week, “with a clear bias to the buy side.” Only Tesla Motors, NVIDIA, and Palantir Technologies Inc., which Sosnick described as “perennial leaders,” were more actively traded than Circle.

The interest in Circle and other crypto-related companies makes sense given how dramatically the price of Bitcoin has rebounded in recent weeks following a steep plunge earlier this year. Cathie Wood’s ARK Invest has loaded up on Circle, for example. The stock is now the sixth-largest holding in her flagship ARK Innovation ETF exchange-traded fund.

Brokerage firm eToro Group Ltd. has also gone public, and its shares are up about 30% from their offering price. Galaxy Digital Holdings Ltd., a crypto investing firm run by Bitcoin bull Michael Novogratz, also recently debuted on the Nasdaq through a direct listing. It had previously been trading on the Toronto Stock Exchange. And Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss, said last week that it has filed confidentially with the Securities and Exchange Commission for an IPO.

So don’t be surprised to see more companies looking to piggyback off Circle’s success.

“Circle had a phenomenal performance. Other companies are seeing this and hoping to capture some of that as well. We expect a wave of crypto IPOs,” said Laura Katherine Mann, a partner in the Americas Capital Group for law firm White & Case.

It’s true that the IPO window in general may now be open, and not just for crypto companies. Digital bank Chime is set to go public later this week, a sign of the strong demand for fintech companies in general.

“Circle’s success is a temperature gauge for the whole industry,” said Stephen Richardson, chief strategy officer and head of banking with Fireblocks, a digital asset custody firm, in an email to Barron’s. Richardson added that the more friendly tone from the Trump administration towards crypto “has opened up significant pent-up demand for digital assets from Wall Street players.”

But investors need to be increasingly cautious about chasing Circle, or other hot new stocks such as cloud/AI wunderkind CoreWeave, Inc., at what are now lofty levels.

Circle, for example, now has a market valuation of about $25 billion. To put that in perspective, that is 15 times last year’s revenue of about $1.7 billion and more than 160 times net income of a little more than $150 million.

That, needless to say, is a huge premium not only to where a typical bank trades but also even much higher than the multiples for digital asset giant (and Circle investor/partner) Coinbase Global, Inc., which is valued at around 10 times 2024 sales and 25 times last year’s earnings.

That’s not to say that Circle can’t climb higher in the near-term. Investment banks are likely to issue bullish coverage on the stock within the next month, once the 25 day “quiet period” that prohibits underwriters of the stock to publish reports expires.

Circle has the backing of top Wall Street firms, with JPMorgan Chase, Citigroup, and Goldman Sachs as lead underwriters and 12 other firms listed as being part of the deal.

There’s also the fact that many insiders who own shares of Circle will be prohibited from selling shares until the so-called lockup expiration period expires in 180 days. That’s not until early December.

So it’s understandable why investors are giddy about Circle’s first few days of trading. John Ma, CEO of crypto investing firm Artemis, wrote in a post on X last week that if Circle rival Tether went public today, it could be worth a staggering $515 billion, more than Coca-Cola and Costco. Tether has the largest market value among stablecoins, which are cryptos pegged to assets like the U.S. dollar and gold, Ma based that estimate on a multiple of nearly 70 times his firm’s estimated earnings before interest, taxes, depreciation, and amortization (Ebitda) for Circle in 2025 and a similar multiple for Artemis’ estimated Ebitda of $7.4 billion for Tether this year. Tether reported an unaudited net profit of $13 billion for 2024.

That said, Ma conceded in his X post that these multiples are “insane and unlikely to hold up.” And for what it’s worth, Tether CEO Paolo Ardoino said in a follow up post on X that Tether has “no need to go public.”

So investors who want pure play exposure to stablecoins will have to content themselves with Circle for now. That’s if they can stomach the nosebleed valuation.