Key risks:
• 99% of Circle's revenue comes from US Treasury yields – dependent on Fed interest rates.
• 2024 profits are expected to decrease by 42% due to anticipated Fed interest rate cuts.
• The SEC is considering classifying USDC as a security – which could force Circle to change its business model.
Competitive pressure:
• The MiCA regulation in the EU could erode profits by up to 15%.
• USDC only holds 29% of the stablecoin market share, while USDT still dominates with 70%.
• Circle is struggling to expand in emerging markets – where users still prefer USDT.
Conclusion:
• The IPO is just the beginning. The long game lies in the ability to adapt to the regulatory framework and expand the global USDC ecosystem.
