Circle reports a loss of $482 million in Q2, simultaneously launching its own blockchain
Dollar stablecoin (USDC) issuer Circle announced yesterday (8/12) its Q2 financial report for this year, which, despite impressive revenue performance, showed a net loss of $482 million.
On the same day, Circle announced the launch of a Layer-1 blockchain 'Arc' specifically designed for stablecoin finance, officially declaring its entry into the public chain race. However, following this announcement, Circle's after-hours stock price fell by 6% due to another announcement.
Circle reports a loss, but revenue and USDC trading volume both grow
Circle's Q2 financial report shows total revenue and reserve income reached $658 million, a 53% increase compared to the same period last year.
In addition, the circulation of its core product, the $USDC stablecoin, has a year-on-year growth rate of 90%, and the total on-chain transaction volume has surged more than five times, reaching $5.9 trillion, with market share increasing to 28%, indicating that its business fundamentals remain strong.
However, the financial report also revealed a net loss of $482 million. Circle explained that the loss mainly stemmed from one-time non-cash expenses related to the company's IPO (Initial Public Offering) in June this year, including up to $591 million in stock rewards and changes in the fair value of convertible debt.
Excluding these items, Circle's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) actually grew by 52%, reaching $126 million.
Circle launches the Arc public chain, competing with Tether's Stable chain.
At the same time as the financial report was released, Circle officially introduced its new Layer-1 blockchain 'Arc' in a press release.
Arc is positioned as an infrastructure tailored for stablecoin finance, aiming to address existing public chain issues such as unstable costs and insufficient data privacy.
Arc features several characteristics:
Using $USDC as the native gas token, providing predictable dollar-denominated transaction fees.
Built-in foreign exchange (FX) engine, supporting institutional-level quotes and on-chain settlement.
Utilizes a high-performance consensus engine named Malachite, achieving sub-second transaction finality.
Offers optional privacy protection features.
Compatible with the Ethereum Virtual Machine (EVM), making it easy for developers to migrate and build.
Source: Circle Circle launches Arc stablecoin public chain, competing with Tether's Stable chain
On the other hand, Circle's competitor Tether's supported Layer-1 project 'Stable' has recently completed $28 million in seed funding, with the chain targeting $USDT as its native gas token, aiming to make stablecoin payments more immediate and widespread.
In addition, payment giant Stripe is also reported to be collaborating with crypto venture capital Paradigm to jointly create a Layer-1 public chain 'Tempo' focused on payments, which is also EVM compatible. This signifies that competition among stablecoin issuers has expanded from simple market share to a battle for the underlying public chain ecosystem.
Further Reading:
Payment giant Stripe partners with venture capital! Developing its own blockchain Tempo to create an independent payment network
Tether once again enters the U.S. market! CEO: Plans to launch institutional stablecoin, confronting Circle head-on?
Circle announces stock issuance, after-hours stock price falls 6%.
Despite launching new products, Circle's stock price (CRCL) fell by 6% in after-hours trading.
Source: Google Circle announces stock issuance, after-hours stock price drops by 6%
Foreign media (CoinDesk) pointed out that the main reason for the stock price drop was the company's simultaneous submission of documents to the U.S. Securities and Exchange Commission (SEC) announcing a secondary offering of 10 million shares.
According to documents, 2 million shares were issued by Circle, while another 8 million shares were sold by existing shareholders.
Since Circle has been listed for only about two months, the market interprets this as insiders and the company seeking to cash out while the stock price is still high, raising investor concerns about equity dilution and future stock price pressure, leading to a decline in stock price in after-hours trading.
See more news related to Circle:
Don’t want to rely on Circle? Rumors that Polymarket is considering launching its own stablecoin, with support from the genius bill passing.
USDC issuer strikes again! Circle applies for a trust license to create the first digital currency bank.
Is the Circle craze over? JPMorgan warns of overvaluation, two major factors may restrict growth.
The article 'Circle reports a loss of $482 million in Q2! Launching stablecoin blockchain Arc to compete with Tether's Stable chain' was originally published on 'Crypto City'
