How much can Circle rise???

Circle is the issuer of USDC, which is the world's second-largest crypto stablecoin (the first is USDT). The entire stablecoin market is currently about $250 billion, with USDC accounting for 24%, approximately $60 billion.

Is Circle making money now?

Last year, Circle made $1.6 billion, but had to share $900 million with Coinbase, leaving only $120 million after taxes. The market now values it at $44.4 billion, which seems a bit expensive according to traditional valuation methods; it can only be bought as a growth stock.

What is the potential for the future?

Wall Street predicts that by 2028, the stablecoin market could rise to $2 trillion. If USDC can maintain its current market share, Circle could capture $480 billion, which is 8 times its current value.

At that time, it might earn $12.8 billion annually, corresponding to the current valuation, resulting in a price-to-earnings ratio of only 3.64, indicating it is undervalued. A valuation reaching hundreds of billions is not a dream; a 10 to 20 times increase in 3 years is possible.

Where are the risks?

54% of the profits go to Coinbase, and no one knows if this revenue-sharing mechanism will change. Additionally, this assumes that the stablecoin market can really grow this large.

My choice

I plan to buy a little Circle first, considering it as buying “future possibilities,” just like some people bought Bitcoin back in the day. If stablecoins really take off, this investment could be very worthwhile; if not, I’ll just chalk it up to a wrong bet.