Circle (CRCL): Stablecoin giant, speculative investment
More macro than management (at least for now)
1. Introduction
What happens when a listed fintech’s fortunes depend more on interest rates and crypto sentiment than on its own strategy and execution? That, in a nutshell, is the tension at the heart of Circle Internet Group (CRCL).
Circle sits at the centre of the stablecoin ecosystem. It issues USDC and EURC, fully reserved digital dollars and euros that move across blockchains and into exchanges, wallets and fintech apps around the world. If you care about the future of tokenized money and programmable finance, you can’t ignore Circle: USDC has become the leading regulated payment stablecoin, with deep liquidity and growing institutional adoption.
But from an equity investor’s perspective, the story looks much less straightforward. Today, Circle’s business model is overwhelmingly driven by interest income on the reserves backing USDC and EURC. Revenue scales when two things that management doesn’t control move in its favour: short-term interest rates and the total amount of USDC in circulation. A third external factor (i.e. how much of that interest income Circle must share with powerful distribution partners like Coinbase and Binance) determines how much of the economics actually accrues to shareholders.
