Circle IPO may be delayed, what is the valuation of "the first share of stablecoin"?

Written by Wenser (@wenser 2010)

At the end of March, according to Fortune news, stablecoin issuer Circle has hired an investment bank to start IPO preparations, and plans to publicly submit a listing application to the SEC in late April; On April 1, Circle officially filed an S-1 prospectus with the SEC to list on the New York Stock Exchange under the symbol CRCL. Just when the market thought that this move might mean that there was no more suspense about "Trump's first crypto IPO after taking office", just a few days later, as Trump's tariff and trade war officially began, there was market news that Circle would postpone the IPO process. As a result, the suspense continues over who will end up in the crypto IPO after Trump came to power and aspire to establish a crypto-friendly government.

In this article, Odaily compares the current state of the stablecoin market, U.S. crypto regulatory trends, and the Circle valuation system with other potential crypto IPOs.

Suspense 1: Can Circle win the crown of "the first stablecoin concept stock"?

Let's start with the conclusion, Circle has a high probability of winning the crown of "the first stablecoin concept stock".

Here's why:

1. Major competitors have no intention of adopting the "IPO route". Previously, after Circle submitted a prospectus for its IPO application, Paolo Ardoino, CEO of Tether, the issuer behind USDT, posted that Tether does not need to be listed. (Odaily Note: It is worth mentioning that Paolo's tweet is accompanied by a photo of himself and the Wall Street Bronze Bull, which is quite a bit of "I don't need to talk to Wall Street investment banks about going public, but Wall Street investment banks need me")

Tether CEO's domineering speech

2. Circle is firmly in the second place among stablecoin issuers. According to the Coingecko website, USDC currently has a market capitalization of $60.14 billion, second only to USDT with a market capitalization of $144 billion, ranking 6th in the cryptocurrency industry by market capitalization.

3. Circle has a well-established compliance system and can be called the "most compliant stablecoin issuer". It is understood that Circle is registered as a money services business (MSB) in the United States and complies with relevant regulations such as the Bank Secrecy Act (BSA); It has money transfer licenses in 49 U.S. states, Puerto Rico, and the District of Columbia; In 2023, Circle received a Master Payment Institution license from the Monetary Authority of Singapore (MAS) to allow it to operate in Singapore; In 2024, Circle received an Electronic Money Institution (EMI) license from the French Prudential Regulatory and Resolution Authority (ACPR), enabling it to issue USDC and EURC in Europe under the European Union's Regulation in the Markets in Cryptoassets (MiCA) regulations. It can be said that USDC is one of the few stablecoins that has adopted compliant operations in the United States, Europe, and even Asia.

Therefore, based on the current progress of IPO application submission, USDC's market position, and the performance of other competitors, Circle should be the "first stablecoin concept stock".

The next question is: can Circle's main business be the market value support after the IPO? The answer also needs to be found in Circle's IPO prospectus.

Suspense 2: Is Circle's USDC stablecoin a good business that is sure to make money without losing money?

Again, let's start with the conclusion, at the moment, Circle's operating conditions are not particularly optimistic.

Previously, we conducted a detailed analysis of the specific situation and business model of Tether, the overlord of the stablecoin track, in the article "The Market Value of USDT Hit a New High, Revealing the Secrets of the 100 Billion Business Empire Behind Tether". In the article "Inventory of the 7 Crypto Gold Absorbing Machines: With an Annual Profit of $14 Billion, It Is the Ultimate "Tax Official" in the Crypto World", we also conducted a human-efficiency analysis of Tether's "gold absorption machine" with an annual profit of nearly $14 billion and fewer than 200 employees, and Tether's "high-profit, small team" made it the top of the list.

But Circle's IPO prospectus shows that there is clearly a big gap between its operating conditions and Tether's:

• In terms of specific revenue: In 2024, Circle reported revenue of $1.68 billion, up from $1.45 billion in the previous year and a year-over-year increase of 16.5%; However, its net profit fell from $268 million to $156 million, down 42% year-on-year. This is partly due to the $908 million in distribution costs paid to partners (including Coinbase, Binance).

• In terms of reserve funds: about 85% of USDC's reserves are invested in U.S. Treasuries (managed by BlackRock's CircleReserveFund) and about 20% in cash deposits in the U.S. banking system; In contrast, USDT's reserves are more diversified, which also includes 5.47% BTC.

USDT Reserve Details

In terms of administrative costs: According to the prospectus, Circle spends more than $260 million in employee compensation and nearly $140 million in administrative expenses annually; Depreciation and amortization expenses amounted to $50.85 million, IT infrastructure expenses amounted to $27.1 million, and marketing expenses amounted to approximately $17.32 million. It has to be said that Circle's name in terms of spending is far more complex than Tether's.

Circle's operating data for the past three years

In addition, it is worth noting that Circle's revenue stream is nowhere near that of Tether, with 99% of its revenue coming from reserve interest, which is about $1.661 billion; Its trading fees and other income were only $15.169 million.

In other words, at this stage, Circle is in the business of "deposits eating interest", rather than being able to "eat both ends of the business" like Tether - it can not only earn reserve interest-bearing income, but also collect corresponding service fees with the help of fund redemption. Remember, the market for cross-border payments is $150 trillion, and right now, this market is dominated by the more decentralized and unregulated USDT.

In contrast, Circle is still under the grip of "partners" such as Coinbase and Binance.

Suspense 3: Will the ambiguous relationship with Coinbase continue?

The full name of the company behind Circle is Circle Internet Financial, Inc., which was originally founded in 2013 by Jeremy Allaire and Sean Neville; The governance of USDC is managed by the Centre Consortium, which was formed by Circle and Coinbase. However, as the regulatory environment changes, in August 2023, Circle spent $210 million in shares to acquire the corresponding stake in Coinbase in the Centre Consortium, fully taking over the issuance and governance of USDC, but the 50%:50% share agreement between the two still continues to this day.

Distribution cost information in the Circle prospectus

In 2024, of the $908 million in distribution costs paid by Circle to Coinbase, according to Coinbase's previously released Form 10-K annual report, $224 million of which was rewarded to users in the form of staking rewards (4.5% of the yield can be obtained by holding USDC, and users have previously reported that the APY is even as high as about 12%), and the remaining about $686 million belongs to Coinbase Company.

@0x_Todd The real income received and the corresponding interface

At present, this move may be understood as a "conspiracy" adopted by Circle and Coinbase to expand the circulating market value and market share of USDC - then again, with such a high interest-bearing rate of stablecoins, it is difficult not to wonder whether Coinbase and Circle have to pave the way for the IPO, and staged a "high-interest savings" drama for retail investors in the market.

In addition, Coinbase is not the only one that enjoys Circle's hefty distribution benefits, Binance is also on the list.

According to the prospectus information, in November 2024, Binance became the first approved participant under the Circle stablecoin ecosystem protocol. According to the cooperation agreement, Binance is required to promote USDC on its platform and hold a certain amount of USDC in fiscal reserves; Circle paid Binance a one-time upfront fee of $60.25 million and agreed to pay a monthly incentive fee based on the USDC balance held by Binance. The incentive fee is only paid if Binance holds at least 1.5 billion USDC, while Binance commits to holding 3 billion USDC (with specific exceptions). The cooperation is divided into two parts, marketing and financial reserves, both for two years. If Binance terminates the marketing agreement early, it will still be subject to a one-year reduced fee payment and promotion obligation. The parties may terminate the Agreement early under certain circumstances.

It can be seen that when it comes to wooing allies to expand market fundamentals, Circle is well aware of the importance of holding high and fighting high.

In addition, in the past year, Circle has also made frequent moves in the Solana and Base ecosystems, only in the Solana ecosystem, according to incomplete statistics from Odaily Planet Daily, since 2025, it has issued more than 3.25 billion USDC, a total of 13 times, and a single issuance of up to 250 million.

Incomplete statistics

On March 26, when the issuance of USDC on the chain exceeded $60 billion, according to TheBlock, which:

• Ethereum has a circulation of about 36 billion;

• Solana is about 10 billion;

• Base: about 3.7 billion;

• Hyperliquid is about 2.2 billion;

• Arbitrum is about 1.8 billion;

• Berachain is about 1 billion.

TheBlock counts the issuance of USDC on each chain

As of now, the USDC circulation remains at around $60 billion, and according to DefiLlama data, the total market capitalization of stablecoins is currently about $233.535 billion, a 7-day decrease of about 0.58%; USDC has a market share of about 26%.

From this, we can conclude in stages that Circle's future development is still inseparable from Coinbase's support, and similarly, it may still continue to "supply" about 50% of the distribution revenue to Coinbase.

Suspense 4: Will Circle be affected by the U.S. stablecoin regulatory bill?

In the prospectus, Circle cites potential regulatory legislative risks, such as U.S. regulators or legislation requiring stablecoin issuers with more than $10 billion to be bank-related or affiliated with a bank.

Prospectus Risk Disclosure Part Information

According to the available information, the latest progress of the U.S. Stablecoin Regulatory Act is as follows:

In February 2025, U.S. Senator Bill Hagerty and others proposed the U.S. Stablecoin National Innovation Guidance and Establishment Act (GENIUS Act) to establish a federal regulatory framework for payment-based stablecoins. The bill stipulates that stablecoin issuers with a market capitalization of more than $10 billion will be regulated by the Federal Reserve Board (FED), while smaller issuers will have the option to operate under state-level regulation; All issuers must support their stablecoin issuance 1:1 with high-quality liquid assets (e.g., USD, Treasury bonds) and prohibit the issuance of algorithmic stablecoins.

At the same time, U.S. Rep. Maxine Waters introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE Act), which requires all stablecoin issuers to be federally licensed and supervised by the Federal Reserve; The Act emphasizes consumer protection, requires issuers to hold reserve assets equivalent to the amount issued, and to comply with anti-money laundering (AML) and KYC regulations.

As a pacesetter in stablecoin compliance, it stands to reason that Circle should make the necessary risk disclosures in this regard. And despite previous news that "Tether is working with U.S. lawmakers to influence the way fiat currencies are regulated in the U.S.", Circle, with allies such as Coinbase and BlackRock, should not have much of a problem dealing with regulatory pressure.

Therefore, the risks in this area are relatively manageable.

Suspense 5: What is the valuation of Circle?

Although Circle's S-1 filing does not give a specific IPO fundraising price, it is currently valued at around $4 billion to $5 billion based on secondary market transactions, with a shareholding structure of Class A (1 vote/share), Class B (5 votes/share, capped at 30%), and Class C (no voting rights), with the founders retaining control. The listing will also provide liquidity to early-stage investors and employees.

Compared with the previous high valuation of $9 billion in the last round of financing, this data has been halved due to the market share of stablecoins and the recent decline in market conditions, but there is still some room for profit.

In comparison, Coinbase's stock price is trading at $151.47 today, with a market capitalization of $38.455 billion. That's about 8-9 times the size of Circle.

In addition, due to the Trump administration's tariff trade war, the Fed's interest rate cut expectations may affect Circle's revenue, which should also be taken into account.

Whether Circle's diversified businesses can support the corresponding valuation remains to be verified by time.

The author personally believes that compared with USDT, which has more flexible usage scenarios, USDC can only usher in more room for development when it is combined with the related business of Bank of America. U.S. banks Custodia Bank and Vantage Bank jointly issued Avit, the first U.S. bank-backed stablecoin based on a permissionless blockchain, on the Ethereum network, a move that may signal the next round of increasingly fierce stablecoin competition.

If Circle wants to secure its status as the "second largest stablecoin", it may also need to learn from Tether's experience in generating revenue in terms of BTC reserves, redemption fees, etc.

Finally, let's mention an "easter egg" in Circle's IPO prospectus - Circle officially mentioned that it is a "telecommuting-oriented company" with higher operational and cyber security risks, combined with the theft of Bybit's $1.5 billion assets in February and the various security incidents caused by hackers represented by the North Korean hacker group Lazarus Group, this risk warning may not be groundless. Rather, it is a risk trigger that many crypto projects need to consider in advance.

Circle officially discloses the risks of remote work

Finally, the Odaily authors personally predict that Circle will still conduct crypto IPOs earlier than crypto companies such as Kraken and Chainalysis, after all, for stablecoin companies with high operating costs and a single narrative, it is more urgent to reach "leeks outside the circle" through IPOs.