Pre-IPO vs IPO: Which Stage Is More Profitable? Latest Data Analysis for 2026

On June 5, 2025, stablecoin issuer Circle officially listed on the New York Stock Exchange under the ticker "CRCL." In just two trading days, its stock price soared from an issuance price of $31 to $107.7, a cumulative increase of 247%, with an intraday high approaching $123.5. The buzz surrounding this "world's first stablecoin stock" has brought a long-standing investor question back to the forefront: Pre-IPO vs. IPO, which stage offers more profitable entry?

Comparing Returns at the Circle IPO: The Disparity Between Two Stages

Circle's listing is arguably one of the most talked-about IPOs of 2025. Data shows that this issuance raised $1.1 billion and was oversubscribed by more than 25 times. However, Wall Street investment banks severely misjudged Circle’s valuation—underpricing the stock at $31 per share, which closed its first day at $82.84, a 167% increase. Based on the closing price, the issuer missed out on approximately $1.72 billion in potential funding. This gap makes it the seventh-largest IPO underpricing case in nearly four decades, second only to giants like Visa and Airbnb.

Beyond this pricing controversy, a more noteworthy point for investors is the uneven distribution of returns. Institutions that invested early in Circle in 2018 have reaped returns of several times, even dozens of times, their initial investments upon the company's listing. Meanwhile, retail investors who rushed into the secondary market on IPO day, although riding the wave of the "world's first stablecoin stock," faced entry costs that already differed vastly from early investors. As of June 9, Circle’s market cap had climbed to about $24 billion, with a price-to-earnings ratio approaching 150. It’s clear that the most lucrative window for returns was precisely in the stage before the IPO bell rang.

Not an Isolated Case: Multiple IPOs in 2025 Confirm the Same Pattern

Moving beyond Circle, other star companies going public in 2025 provide further evidence.

Design software company Figma, after failing to be acquired by Adobe due to antitrust issues, went public independently in 2025. Its IPO price was $33 per share, closing the first day at $115.5, a 250% increase, with a market cap nearing $68 billion. Similarly, crypto exchange Bullish also performed astonishingly, surging 290% on its first day. These cases reveal a consistent pattern: a significant "valuation leap" on the IPO debut. For ordinary investors who missed out on the Pre-IPO rounds, this leap represents an uncatchable excess return.

Market data supports this conclusion quantitatively. According to S&P Global, the average first-day return of U.S. IPOs in the first half of 2025 was 15.3%, significantly higher than 10.5% in the same period of 2024. The tech sector performed especially well, with post-IPO trading prices exceeding issuance prices by over 140%, with Circle’s stock having increased by 485% since its IPO. So far in 2025, the U.S. IPO market has completed 168 deals, raising nearly $28.9 billion, reaching the highest level since 2021.

Meanwhile, a research report on IPOs of emerging companies indicates that the average return for Pre-IPO investors is about 43%, while IPO-stage investors see only 36% profit, and Post-IPO investors further drop to 32%. The return gradient across these three stages is clear—earlier entry correlates with higher success rates. All these data points lead to a clear conclusion: the Pre-IPO stage is not only a valuation leap zone but also the primary source of excess returns.

Why Are Returns Higher in the Pre-IPO Stage?

Understanding the return differences between Pre-IPO and IPO requires revisiting valuation logic itself.

In traditional IPO processes, underwriters often adopt a "cautious pricing" strategy, reserving room for a first-day surge. This approach ensures successful issuance but also creates a gap between the offering price and the fair market value—precisely the return zone for Pre-IPO investors. The $1.72 billion underpricing of Circle’s IPO exemplifies this phenomenon.

A broader perspective comes from comparing private markets with public markets over the long term. Over the past 25 years, the total value created in private markets has been roughly three times that of the public stock market during the same period. Many excellent companies raise billions through multiple private funding rounds, delaying or avoiding IPO altogether. For example, OpenAI raised $6.6 billion from investors like Microsoft and SoftBank in October 2024, and by March 2025, it completed a $40 billion funding round—one of the largest private financings in history. This indicates that huge growth dividends are generated and distributed well before the IPO.

Additionally, traditional Pre-IPO investments face three major barriers: high capital thresholds often in the hundreds of thousands or millions of dollars, making access difficult for ordinary investors; long lock-up periods with poor liquidity; and premium assets like SpaceX, OpenAI, ByteDance, which are mostly traded among top-tier institutions. These barriers create a "high-return, low-access" closed market, locking in excess returns within elite circles for a long time.

Risks in the IPO Stage: Not a Sure Win

It’s important to note that IPOs are not guaranteed profit machines.

In the first half of 2025, despite a strong U.S. IPO market, global IPO activity remains subdued. According to London Stock Exchange data, as of mid-June, global IPO proceeds declined about 9.3% year-over-year to $44.3 billion, the lowest in nine years. Even in the relatively active U.S. market, investment banks’ valuation judgments on crypto and tech companies often miss the mark—highlighted by reports like Bybit’s, which point out that Circle’s IPO reflects Wall Street’s valuation model struggling to adapt to the crypto industry.

Meanwhile, the competitive landscape in crypto is also shifting. Bybit reports that from DeFi to security sectors, companies like Fireblocks and Chainalysis are seeking IPO valuations in the tens of billions of dollars. This means opportunities still exist, but assessing fundamentals, industry competition, and macro policy environments will be more critical than ever.

The Evolution of the Pre-IPO Track: A Breakthrough for the Crypto Industry

Notably, the crypto industry is reshaping Pre-IPO access rules in a unique way.

In June 2025, Robinhood, a major online brokerage, launched "stock tokens" of unlisted unicorns like OpenAI and SpaceX in Europe. Although OpenAI quickly clarified that these tokens do not represent actual equity, the event signals that tokenization of primary market assets is entering mainstream finance.

Currently, there are three main models for Pre-IPO asset tokenization: specialized pre-IPO trading platforms (e.g., PreStocks, which holds company shares via SPV structures and maps them 1:1 on-chain), crypto exchanges offering Pre-IPO channels (leveraging compliance partnerships and platform traffic), and broader RWA (Real-World Asset) frameworks for tokenized equity. For example, PreStocks has nearly $920 million in total Pre-IPO asset trading volume, with about 17k users, covering hot assets like SpaceX, Kalshi, OpenAI, and Anthropic.

At the exchange level, industry players are accelerating deployment. In July 2025, Gate launched xStocks, a dedicated platform for perpetual contracts of tokenized stocks, pioneering global access to such assets. Subsequently, Gate partnered with Ondo Global Markets to launch the Ondo section, which by September 2025 offers trading permissions for 26 tokenized stocks and ETFs, covering major tech stocks and popular indices, with USDT as the trading currency—significantly lowering the barrier for global investors to participate in tokenized equity assets.

These innovations share a core logic: leveraging blockchain technology to break down traditional barriers of capital thresholds, liquidity constraints, and information asymmetry, enabling more ordinary investors to get early exposure to leading companies shaping the future.

Summary

Overall, both Pre-IPO and IPO stages have their advantages and disadvantages. But from the perspective of maximizing returns, the Pre-IPO stage is undoubtedly the more attractive choice. Recent data in 2025 shows that the average return for Pre-IPO investors is about 43%, significantly higher than 36% during IPO and 32% post-IPO. The 200%+ surges on IPO debut for cases like Circle, Figma, and Bullish essentially reflect the realization of valuation gaps between Pre-IPO estimates and secondary market fair prices.

However, investment decisions are never one-dimensional. The higher returns in the Pre-IPO stage come with increased risks—low liquidity, regulatory uncertainties, and the control of valuation discourse by companies. In contrast, IPO investments, while offering narrower return ranges, tend to be more compliant, transparent, and liquid.

For ordinary investors, crypto’s tokenization technology is gradually breaking down the traditional barriers of Pre-IPO investing, providing a new pathway that balances potential gains with accessibility. Regardless of the stage chosen, understanding the risk-return characteristics of both phases and aligning them with one’s financial situation and risk appetite is the key to long-term success.