- Circle Prospectus - Stablecoin Market Financial Analysis Report
I. Circle Basic Information
II. Market Size and Competitive Landscape
The stablecoin market shows a clear head effect, with the leading Tether (USDT) holding an absolute dominant position with a share of 65% and an issuance of $150 billion, while Circle (USDC) firmly holds the second position with an issuance of $60 billion.
Circle's issuance scale is $60 billion. Although there is still a significant gap from the leading Tether's $150 billion, it has a clear lead of $7.3 billion over the third place, making it a stable second position.
III. Revenue Structure and Profit Analysis
Total revenue for 2024 is $1.676 billion, with 99.1% of revenue coming from interest income generated by USDC reserve assets, reaching $1.661 billion, while other income is only $15.169 million.
Despite revenues reaching $1.6 billion, the net profit is only $156 million, with the several billion in costs primarily attributed to the issuance expenses of the stablecoin.
IV. Cost Structure Analysis
Circle has partnered with Binance, the world's largest cryptocurrency exchange, allowing USDC to participate in the Binance Launchpool, prompting the supply of USDC on the Binance platform to rise from less than $1 billion to $4 billion.
With an issuance of $3 billion, the revenue is approximately $83 million per year, which is mostly paid to Binance.
V. Circle's Listing Journey
Although the listing valuation has been adjusted to $7.2 billion, early investors have not made much profit. Most of the investments were made at valuations of $4.5 billion or higher.
Additionally, in 2022, the issuance scale of USDC was $55.7 billion, which is not much different from the current $60 billion scale, so the valuation in the capital market has not increased significantly.
USDC, as a stablecoin that has already established itself in the market as the second leader and is the most used stablecoin in the United States, shows a gap in investment returns and growth for Circle. The stablecoin industry has a clear head effect, with the leading Tether holding a significant advantage, while new entrants like Trump's USD1 are continuously capturing market share. Whether USDC can leverage its listing on the US stock market to increase its issuance scale remains to be seen, but compared to stablecoin projects in the crypto space valued at tens of billions, Circle is still quite attractive, with a clear and easy-to-understand profit model.