Circle's stock price breaks $200 to reach a new high! CRCL's market capitalization is nearing 80% of USDC's issuance.

Last night (18th), after the opening of the US stock market, the stock CRCL of Circle, the issuer of the US dollar stablecoin USDC, once again hit a historic high, closing extremely close to $200, with a rise of over 33.8%. After hours, it rose another 6.15% to $211.87, an astonishing increase. In just two weeks, CRCL surged 645% from an opening price of $31, currently reaching a market capitalization of $48.4 billion, about 80% of its issued stablecoin USDC's circulating total market value. Is the rise in Circle's stock price reasonable? From a fundamental perspective, the USDC stablecoin operated by Circle is currently the second largest dollar stablecoin by circulation, with a total market capitalization of $61.5 billion, maintaining a market share of between 24% and 27%, making it a major competitor to Tether. However, compared to Tether, USDC's compliance strategy has a clear regulatory advantage. It obtained a New York BitLicense early on and complies with the EU MiCA regulatory framework, which has allowed it to gain the trust of institutional investors and large financial institutions in an increasingly clear policy environment, accelerating its application in decentralized finance (DeFi), cross-border payments, trading matching, and other diverse scenarios, enhancing its network effect and establishing its key role as financial infrastructure. Additionally, the stablecoin bill that the US Congress is about to discuss is seen as favorable policy, further consolidating the legal status of dollar stablecoins and potentially boosting the company's future business growth and valuation. Detailed financial performance analysis Despite Circle's impressive revenue performance in 2024, reaching $1.676 billion, a year-on-year increase of 16%, net profit has significantly declined. This is mainly due to a substantial increase in distribution and cooperation costs, especially the high costs arising from the complex cooperation with Coinbase. This has led to a rapid decline in its gross profit margin from 62.8% in 2022 to 39.7% in 2024. Reports indicate that Circle paid $910 million in interest-sharing to Coinbase in 2024. Profit model and challenges Circle's main source of revenue is reserve interest income. However, this profit model also carries structural risks; once the Federal Reserve enters a rate-cutting cycle, Circle's reserve earnings will face systemic decline. This frantic pursuit reflects the market's expectations for new financial infrastructure, but is the current investor chase for 'scarce assets' surpassing rationality? A moment of calm reflection is needed. Related reports Arthur Hayes full text: Circle is severely overvalued, but I advise you not to short ARK Invest sells about $51.7 million of Circle stock at a high price, with a cost ratio of only 10%. USDC lands in the Middle East! Circle receives preliminary approval for monetary services in Abu Dhabi, furthering global compliance. 'Circle's stock price breaks $200 to reach a new high! CRCL's market capitalization is nearing 80% of USDC's issuance.' This article was first published on BlockTempo (the most influential blockchain news media).