<div id="readability-page-1">The capital markets have been anything but predictable this year. As of the closing bell on June 12, the S&amp;P 500 and Nasdaq Composite have gained just 3% and 2% on the year, respectively. The common thread stitching these mundane gains together is uncertainty. From ongoing tariff negotiations, interpretations of economic data, and how the Federal Reserve could alter its policies, to geopolitical tensions across Europe and the Middle East, investors have been left scratching their heads trying to find a safe haven for their cash. Nevertheless, one pocket of the stock market that has been hot this year is initial public offerings (IPOs). Over the last couple of weeks, fintech companies Circle Internet Group (CRCL 25.36%) and Chime Financial (CHYM -6.25%) completed their IPOs. Despite the turbulence weighing on the stock market, both Circle and Chime have witnessed skyrocketing share prices since going public. Let's explore what these companies do and try to understand what is driving the positive investor sentiment. From there, I'll give my opinion on which stock I like better for the long run. <h2>What does Circle do?</h2> Circle operates at the intersection of payments infrastructure and cryptocurrency. More specifically, the company is the issuer of USDC, a stablecoin that is pegged to the U.S. dollar. While Circle very much operates in the decentralized finance (DeFi) realm, it could be argued that an investment in the company is a safer alternative to cryptocurrencies such as Bitcoin or Ethereum. The reason I say that is because Circle, while heavily dependent on crypto adoption, provides some degree of insulation from the volatility typically exhibited by crypto tokens. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjE3MjUvZ2V0dHlpbWFnZXMtMTI4MTI5NzQxNC0yLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjE3MjUvZ2V0dHlpbWFnZXMtMTI4MTI5NzQxNC0yLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>What does Chime do?</h2> Chime is what's known as a neobank. Like SoFi Technologies, Chime positions itself as a tech-first banking-as-a-service platform. This is a unique model in the financial services industry, which still primarily relies heavily on physical brick-and-mortar locations to offer lending and investment services that can also be marketed online. <h2>Circle vs. Chime: Which is the better stock?</h2> Since its IPO earlier this month, shares of Circle have risen by 50% as of this writing. Similarly, Chime stock popped by almost 40% in its public market debut. Of note, shares of Chime have sold off a bit in the days following its IPO, which is not atypical. On the one hand, I think Circle has the potential for some explosive upside. Despite notable competitors like Tether and Ripple, Circle is well-positioned from rising usage of digital dollars over fiat currency. However, I have some concerns about Circle's long-term prospects. Although digital payment infrastructure has several interesting use cases as it pertains to settling transactions or even in the political landscape regarding trade negotiations, the regulatory environment surrounding cryptocurrency is still evolving. For this reason, I question how widely adopted the services Circle offers could become within large financial institutions. On the other hand, I see Chime's business as a bit commoditized. While technology-native applications offered by Chime or SoFi have been accepted by younger demographics, I think the true ceiling for these businesses is somewhat limited. Lifelong customers of incumbents such as Wells Fargo or JPMorgan Chase may be wary of changing platforms. At the moment, I would pass on both Chime and Circle. Both are exhibiting characteristics of momentum stocks, which can be risky investments. If I had to choose between these two fintech opportunities for the long run, though, I'd pick Chime. To me, there is too much uncertainty around the regulatory landscape for crypto, and the crypto industry more broadly is highly volatile. This makes Circle too much of a gamble for my investment profile. Moreover, in a scenario in which cryptocurrency does eventually become a mainstream form of payment, I see an opportunity for Chime to leverage its digital infrastructure to strategically partner with the likes of Circle, Tether, Ripple, and more -- thereby not limiting itself to one provider. For these reasons, I like Chime as the better long-term opportunity, but I would wait for a dip in the share price as opposed to following the IPO-driven volatility. </div>

CRCL

The article compares two fintech IPO stocks, Circle and Chime, amidst a volatile market. Circle, known for its USDC stablecoin, has seen a 50% rise since its IPO, while Chime, a neobank, rose nearly 40%. The author expresses concerns about Circle's long-term prospects due to regulatory uncertainties in cryptocurrency, while viewing Chime as a more stable option despite its commoditized nature. Ultimately, the author prefers Chime for long-term investment but advises waiting for a price dip before buying.

- The capital markets have shown limited gains this year, with the S&P 500 and Nasdaq Composite up 3% and 2%, respectively, amid uncertainty from various economic factors.  
- Initial public offerings (IPOs) have thrived, particularly for fintech companies Circle and Chime, which saw share price increases of 50% and 40% post-IPO.  
- The author prefers Chime over Circle for long-term investment due to concerns about regulatory risks in cryptocurrency and sees potential for Chime to partner with crypto firms in the future.

Circle vs. Chime: Which Is the Better Fintech IPO Stock?