On June 24, the stock price of stablecoin giant Circle briefly surged to $298, with a total market cap exceeding $77 billion, far exceeding the market cap of its issued USDC stablecoin (approximately $61 billion). As of the close, Circle's stock price fell back to $263.45, with a market cap of approximately $63.89 billion, still exceeding the USDC issuance by about $2.215 billion.
This valuation breakthrough has sparked widespread controversy in on-chain communities and the crypto market: Has Circle's valuation 'decoupled' from USDC? Behind the high premium is either a leap in crypto financial infrastructure or an unexploded valuation bubble?
Is the market really buying 'Circle's future'?
On the surface, the increase in Circle's market capitalization reflects the market's bullish view on its 'super stablecoin business':
Circle is transforming from a stablecoin issuer to a Web3 financial infrastructure provider;
Launch on-chain clearing protocol CCTP, establish cooperative networks with Visa, Solana, etc.;
Circle Mint, compliant custody, cross-chain settlement, and other businesses are seen as the early prototype of 'on-chain version of Swift+PayPal'.
Investors are betting not on USDC itself, but on the on-chain clearing network, corporate payment interfaces, and compliant trading channels that Circle may control in the future.
Risk signal: Market cap decoupling may exacerbate structural vulnerabilities
However, several on-chain data analysts and crypto research institutions point out that the current valuation structure has shown significant imbalance, and Circle's stock performance has seriously outpaced the support from fundamentals, hiding three major risks:
1. USDC growth slows, basic profit model under pressure
According to DeFiLlama data, as of June 24, USDC issuance was approximately $61 billion, a nearly 15% reduction from its peak in 2022. The main profit source for USDC comes from the interest rate spread on reserve assets; once U.S. Treasury yields peak and fall, its revenue capacity will face a natural decline.
If Circle is unable to establish sufficient 'non-USDC revenue pillars' in the future, the current high valuation will be difficult to maintain.
2. The market cap exceeding USDC is essentially leverage of equity against stablecoins
In traditional financial structures, if the equity value of a custody institution significantly exceeds the scale of its managed assets, it often means the market is overly optimistic about its future cash flow expectations. Once confidence reverses, high valuations will amplify the impact of any negative news.
If Circle's stock price experiences severe fluctuations, it will not only affect shareholder confidence but may also impact institutional users' trust in USDC—creating a 'reverse transmission of value anchoring'.
3. Circle still faces dual pressure from compliance regulation and reliance on DeFi
Although Circle has been relatively active within compliance frameworks (including frequent communication with the U.S. Treasury and NYDFS), the large circulation of USDC still relies on the use cases of DeFi protocols (such as Uniswap, Aave, MakerDAO) and CEX. If the following situations occur, USDC and Circle's valuation may face a double hit:
Large DeFi platforms stop supporting USDC due to black swan events;
U.S. stablecoin regulatory bill is unfavorable to Circle's structure;
Sovereign digital currencies or CBDCs may pose a substitute for USDC.
Summary: Is the valuation anchor of stablecoins starting to dissolve?
Circle's market cap surge undoubtedly reflects the market's expectations of its central role in Web3 finance. But this also raises a more fundamental reflection:
When the valuation of a 'stablecoin issuer' begins to far exceed its pegged assets, are we witnessing the formation of a crypto version of 'shadow banking' logic?
And if the market is buying a narrative, who will bear the systemic consequences when the narrative bubble bursts? In a highly interconnected on-chain financial world, once the issuer of stablecoins loses valuation peg, the impact will not only be on shareholders, but may affect the entire Web3 credit system.
Note: Three forward-looking signals investors should pay attention to
1. Daily average on-chain active addresses for USDC (Is there growth in on-chain demand?)
2. Disclosure status of revenue from non-USDC businesses such as Circle Mint/cross-chain protocols
3. Changes in the U.S. stablecoin bill and the International Settlements Organization (BIS) stance on private stablecoin regulation
Recommendation at the end: Circle's 'valuation independence' has become a reality, but whether it has 'valuation consistency' will be a question the Web3 market must answer in the coming year.
