The Numbers That Made TradFi Blink

Let me start with what every analyst missed: Circle’s IPO wasn’t supposed to work. After two failed attempts (remember the SPAC debacle?), this stablecoin issuer finally went public at what looked like conservative multiples. Then came the 180% first-day pop followed by another 30% surge - making it the most explosive debut since 1980 for IPOs over $500M. At 160x earnings, even crypto natives like Dragonfly’s Haseeb Qureshi admitted: “We all underestimated the hunger.”

The Hidden Economics of Digital Dollar Printing

Here’s where it gets ironic. While analysts fixated on Circle’s valuation, they overlooked its profit-sharing agreement with Coinbase - which reportedly takes half of USDC revenues. This creates a bizarre scenario where:

1. Coinbase trades at just 3x earnings when backing out its USDC-related profits
2. Circle becomes the only pure-play stablecoin stock in public markets
3. Tether considers exiting the US rather than complying with proposed collateral rules

“It’s CoreWeave for finance,” remarked Robot Ventures’ Tarun Chitra, referencing the AI infrastructure darling. Both represent scarce proxies for investors desperate for sector exposure.

Regulatory Chess and Banking Countermoves

The Genius Act’s impending vote could reshape the battlefield:

• Circle: Poised to dominate compliant US markets
• Banks: JPMorgan and Wells Fargo reportedly building consortium stablecoins
• Tether: May retreat overseas rather than disclose reserves

As Superstate CEO Robert Leshner observed: “This isn’t just about stablecoins - it’s about market structure.” When traditional banks start wearing crypto jackets while crypto firms adopt banking rigor, you know paradigms are shifting.

Meme Stock or Monetary Policy Tool?

The most telling commentary came from a former Circle employee: “At \(1.2T annual volume with a \)6B valuation, we’re not fintech anymore - we’re monetary policy.” Compare that to Visa’s \(14T volume at \)500B market cap, and suddenly those “absurd” multiples look… logical?

Yet risks loom:

• Profit-sharing drags (hello, Coinbase)
• Banking competitors with deeper balance sheets
• Regulatory overhang from pending legislation

As someone who’s modeled countless valuation scenarios, I’ll say this: When the market values your company based on transactions processed rather than earnings, you’re either running a central bank or heading for a reckoning. Circle might just be both.