IOSG: Rising silently, is Circle undervalued in the red ocean of stablecoins?

Author: Frank , @IOSG

Thanks to YJ, Jocy, and Momir for their reviews and comments on this article!

I. Circle vs Tether: All-Out War Begins in 2026

On December 12, 2025, Circle received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish the First National Digital Currency Bank, a national trust bank. Once fully approved, this key milestone will provide entrusted digital asset custody services to top global institutions, helping to accelerate the growth of stablecoin market capitalization to $1.2 trillion within three years. Riding this momentum, Circle successfully listed in 2025, and with the accelerated velocity of USDC, it became the stablecoin issuer most closely connected with institutional investors. Currently, its valuation has reached $23 billion.

▲ Source: IOSG Ventures

Despite Tether's continued high profitability of over $13 billion as the market leader in stablecoins, its parent company faces ongoing pressure on its business reputation and regulatory oversight. For example, S&P recently downgraded Tether's reserve rating from "strong" to "weak," and Juventus Football Club rejected its takeover offer. On November 29th, the People's Bank of China held a special meeting to crack down on virtual currency transactions, explicitly pointing out that stablecoins have deficiencies in customer identification and anti-money laundering, and are frequently used for money laundering, fraud, and illegal cross-border fund transfers. The regulatory focus is essentially on the offshore stablecoin system represented by USDT. USDT dominates emerging markets in Asia, Latin America, and Africa, especially in East Asia where it holds over 90% market share. Its large-scale circulation occurs in off-chain P2P lending and cross-border financial activities, and it has long operated outside the regulatory system, being viewed by regulators as a "gray dollar system" that exacerbates capital outflows and financial crime risks.

▲ Source: Visa Onchain Analytics

In contrast, the US and EU have not adopted a comprehensive crackdown approach, but rather have incorporated stablecoins into the regulatory system through high levels of compliance. For example, the US GENIUS Act explicitly requires stablecoins to establish a 1:1 high-quality reserve, undergo monthly audits, obtain federal or state licenses, and prohibits the use of high-risk assets such as Bitcoin and gold as reserves.

In other words, China hopes to reduce the "shadow dollar system" of offshore stablecoins at its source, while Europe and the US are trying to establish a "controllable, compliant, and regulated digital dollar system." The common thread between these two paths is their unwillingness to allow opaque, high-risk, and unauditable stablecoins to occupy a systemic position. This means that compliant issuers like Circle can enter the financial system, while offshore stablecoins like Tether will be gradually excluded from developed markets. This is why Tether has recently begun to heavily invest in its USAT, its first compliant stablecoin in the US.

▲ Source: Artermis

While Tether may continue to dominate in offshore and emerging markets, Circle's net supply of USDC also increased by $32 billion over the past year, second only to USDT's $50 billion.

However, Circle has also made significant progress in challenging Tether's offshore and emerging markets, achieving market shares of 48% and 46.6% in India and Argentina, respectively. The main reason for Circle's increased position in these offshore markets is the explosive growth of its crypto card business over the past few years.

▲ Source: Artermis

Crypto cards, which enable users to make purchases at traditional merchants using stablecoin and cryptocurrency balances, have become one of the fastest-growing segments in the digital payments market. Transaction volume grew from approximately $100 million per month at the beginning of 2023 to over $1.5 billion by the end of 2025, representing a compound annual growth rate of 106%. On an annual basis, the market size now exceeds $18 billion, comparable to the peer-to-peer stablecoin transfers ($19 billion), which grew by only 5% during the same period.

▲ Source: Artermis

The opportunity for stablecoin cards lies in addressing genuine needs in many offshore markets, rather than simply being a gimmick. In India, many users still lack access to credit through traditional banks, a need precisely addressed by cryptocurrency-backed credit cards. Meanwhile, in Argentina, people face severe inflation and currency devaluation. Stablecoin debit cards help people preserve their wealth by holding assets pegged to the US dollar.

Stablecoin cards require access to Visa or Mastercard networks for transactions with local merchants, making USDC the most suitable compliant stablecoin. This has resulted in a significant share of transaction volume in offshore regions and countries where stablecoin cards are prevalent. Consequently, we can see Circle and Tether intensifying competition in their respective areas of expertise, and it's difficult to say who has the upper hand in this competitive balance in the short term.

Of course, from a valuation perspective, the two are not even in the same league. USDT's OTC valuation has reached 300 billion, and Bloomberg News reported that it recently raised as much as 20 billion in funding at a valuation of 500 billion. Circle's latest market value, on the other hand, is only 18.5 billion.

▲ Source: Bloomberg

Besides its market dominance, many other factors contribute to Tether's premium valuation, but the primary factor is the advantage of Tether's business model: unlike Circle, it doesn't need to share profits with Coinbase. According to Circle's S-1 filing, Coinbase receives 100% of the reserve income from USDC held on its platform. For USDC held outside its own platform, such as USDC stored on other exchanges, DeFi protocols, or personal wallets, the interest income generated is split 50/50 between Circle and Coinbase.

▲ Source: Beating

According to Beating's analysis, Coinbase's revenue reached 354.7 million in Q3 2025, which is 50% of Circle's own interest income of 711 million during the same period. In other words, for every $2 of interest earned by Circle, $1 had to be given to Coinbase.

Besides not having to share profits, another significant advantage of Tether's USDT is that it doesn't require adherence to collateral restrictions. Circle employs an extremely conservative reserve strategy: 85% is short-term US Treasury bonds and overnight reverse repurchase agreements with maturities of no more than 90 days, and 15% is cash and equivalents, all held in custody by BlackRock or BNY. Furthermore, the accounting firm Grant Thornton LLP issues monthly audit reports, ensuring a 1:1 coverage ratio between circulating supply and reserves, and real-time verification.

▲ Source: CoinLaw

In comparison, we can see that USDT's collateral is more diversified than Circle's, thus resulting in higher reserve returns. This is especially important given the prevailing risk aversion in the market and the continuous rise in gold prices.

This inevitably raises the question: if we take the path of "high compliance + regulatory whitelist", is compliant stablecoin itself a good business?

II. Circle Financial Report: Q3 with Overall Growth

First, let's review Circle's main profit model and revenue as a stablecoin company. Circle stablecoins are minted 1:1 backed by cash and short-term U.S. Treasury bonds as collateral. In a high-interest-rate environment, these collateral reserves can generate substantial interest income.

In the third quarter of this year, Circle's revenue reached $740 million (of which $711 million came from interest income alone), beating the expectation of $707 million. The year-on-year growth was 66%, but the month-on-month growth rate declined slightly. The previous quarter was 13.6%, and this quarter it dropped slightly to 12.5%, but overall it was still at the same level.

USDC's circulation has nearly doubled, and its Adjusted EBITDA margin has reached 22.5%. This rare combination of growth and profitability makes it stand out in the fintech sector, becoming one of the few companies in the industry that combines high growth and high profitability.

▲ Source: Circle Q3 Earnings

This quarter, the company's total quarterly profit (RLDC) reached $292 million, significantly exceeding market expectations, with growth rates roughly in line with the previous two quarters. RLDC (Revenue Less Distribution and Other Costs) is calculated as total revenue minus distribution, transaction, and other related costs. RLDC margin is the percentage of RLDC to total revenue, used to measure the profitability of the core business.

Operating income also significantly beat market expectations, while the previous quarter's operating income was negative, mainly due to one-time stock-based compensation, including $424 million in SBC (employee compensation) and $167 million in debt extinguishment charge. Therefore, for easier comparison, we used Adjusted EBITDA to reflect the recurring operating performance of the core business, by adding back non-core, one-time expenses such as depreciation, amortization, taxes, and stock-based compensation. The Adjusted EBITDA showed accelerating growth both year-over-year and quarter-over-quarter, increasing by 78% year-over-year and 78% quarter-over-quarter, significantly exceeding market expectations.

As we can see, Circle's core revenue source is the interest earned from its reserve assets. However, this revenue model is very fragile and directly affected by macroeconomic interest rates. Therefore, Circle's biggest challenge is whether it can quickly reverse its reliance on a single, vulnerable stablecoin revenue model and diversify its revenue streams.

▲ Circle Q3 Earnings

Therefore, the financial report focuses on the growth rate of other revenue and the growth rate of other revenue as a percentage of total revenue. As long as these two items continue to grow, it means that Circle's revenue model is improving. Conversely, if the growth rates of these two items are declining, it would be a rather bearish signal.

Other revenue reached $28.5 million, significantly exceeding market expectations. However, given that the base figure for the same period last year was only $1 million, this year-over-year data has limited reference value. More meaningful quarter-over-quarter data shows a 20% growth rate this quarter, accelerating from 15% in the previous quarter, indicating that this revenue segment is indeed growing rapidly. However, currently, "other revenue" still accounts for less than 4% of total revenue, and it will take time to change Circle's singular revenue structure.

Nevertheless, this is still a positive sign. Expecting a fundamental shift in the revenue model within just six months is unrealistic, and the current robust sequential growth has laid a good foundation for future diversification.

▲ Source: Circle Q3 Earnings

From a more macro perspective, the stablecoin market is experiencing rapid growth, with its overall circulating supply increasing by 59% year-on-year and on-chain transaction volume reaching 2.3 times that of the same period last year, demonstrating huge market potential.

Against this backdrop, USDC has performed exceptionally well, with its market share steadily climbing to 29%. It's worth noting that even in the face of recent competition from emerging stablecoins such as Phantom $CASH, USDC's upward trend has not been interrupted.

There's a widespread concern in the market: will the increasing issuance of stablecoins lead to USDC no longer being the best stablecoin choice? From platforms offering "stablecoin issuance as a service" (such as Bridge, M0, and Agora) to the influx of numerous companies, these phenomena seem to indicate that the industry will fall into excessive competition (involution), thereby eroding long-term profitability. However, this view largely ignores a key market reality.

USDC's market share growth is primarily attributed to the favorable environment created by regulatory advancements such as the Genius Act. As a leader in compliant stablecoins, Circle occupies a unique strategic position. Globally, whether in the US, Europe, Asia, or in regions like the UAE and Hong Kong where stablecoins are regulated, mainstream institutions tend to choose compliant infrastructures like Circle, which offer trust, transparency, and liquidity, as their preferred partners; otherwise, their related businesses would be difficult to conduct.

Therefore, we believe that concerns about emerging stablecoins potentially challenging USDC's market position are unfounded. On the contrary, USDC is not only poised to solidify its second-place position for a considerable period, but also possesses the strength to challenge the market leader, leveraging its unparalleled compliance advantages. The network scale effect barrier in this process could potentially last for 2-3 years.

▲ Source: Circle Q3 Earnings

USDC's on-chain activity is experiencing explosive growth. Its on-chain transaction volume has soared to $9.6 trillion, 6.8 times that of the same period last year.

This growth is attributed to the success of its Cross-Chain Transfer Protocol (CCTP). CCTP enables seamless and unified transfer of USDC across different blockchains by burning it on the source chain and minting it natively on the target chain, avoiding the complexity and risks of traditional cross-chain bridges.

In summary, whether it's the growth in on-chain transaction volume, CCTP usage data, or the number of active wallets (with a balance greater than $10), all indicators clearly point to the same conclusion: USDC adoption and network speed are continuously and significantly expanding.

▲ Source: Visa

Regarding ecosystem cooperation, Visa announced on December 16 that it would open its USDC stablecoin settlement service to the US network, allowing US financial institutions (Cross River Bank and Lead Bank being the first users) to settle with Visa in USDC through the Solana blockchain.

• Those familiar with the stablecoin B2B payment landscape will know that Cross River Bank and Lead Bank are among the most cryptocurrency-friendly licensed banks in the United States. For example, Cross River Bank and Lead Bank act as sponsor banks, supporting companies like Baanx and Bridge, allowing unlicensed fintech companies to "borrow" their qualifications to issue bank cards and even launch white-label bank card issuance services. For B2B stablecoin payment companies, this also allows access to traditional payment networks, such as Visa/Mastercard Principal Membership, using traditional payment channels like VisaNet, MastercardNet, ACH, FedWire, and RTP for fiat currency clearing and settlement.

▲ Source: IOSG Ventures

The significance of this collaboration lies in enabling Visa's partner institutions to convert all their Visa card settlement transactions to USDC without altering the consumer's card-swiping experience. This enhances the settlement layer, allowing banks and fintech companies to settle transactions 7 days a week, replacing the traditional 5-business-day settlement window, thereby improving the speed and liquidity of fund transfers. Previously, while Visa could authorize transactions 24/7 at 150 million merchants worldwide, settlement was still limited by bank opening hours, wire transfer deadlines, and holiday arrangements. Authorization on Friday, with banks closed on Monday, meant settlement wouldn't be completed until Tuesday.

For Visa, stablecoins and blockchain may not be a threat but rather a new strategic entry point. Visa's logic is simple: vigorously promote Stablecoin-linked Visa cards. Because, regardless of how payment methods change, consumers ultimately need to convert stablecoins into fiat currency to buy things, and this "fiat currency landing" process must first go through VisaNet's network for clearing before interbank settlement of fiat currency. Currently, the vast majority of cryptocurrency card transactions are cleared and settled in fiat currency (the first method in the next diagram), meaning 24/5 clearing and settlement remains the default option because it doesn't require merchant integration. The conversion from cryptocurrency to fiat currency is completed before settlement to the payment network. Therefore, when a transaction reaches the network, this transaction from a cryptocurrency card is no different from any other card payment transaction; from the merchant's clearing and settlement layer perspective, there is no change—it's all fiat currency. The only advantage lies in the user's deposit side: they can spend crypto and deposit without relying on SWIFT.

▲ Source: Artermis

Even if Visa begins piloting USDC settlement, achieving 24/7 settlement, this is not a threat to Visa; on the contrary, it aligns with its strategic interests. The integration of stablecoins does not change its underlying business logic. All stablecoin card transactions still need to go through VisaNet and pay a "toll." Visa's core profit model relies on three main revenue streams: interchange fees charged to issuing banks, acquiring service fees charged to acquiring banks, and network clearing fees charged through VisaNet. Therefore, Visa has absolutely no need to issue its own stablecoin. Its strategy is clear: continuously integrate more stablecoin issuers (such as Bridge, Rain, Reap, etc.), support more stablecoins (such as USDC, EURC, USDG, PYUSD), and connect with more blockchain networks (Ethereum, Solana, Stellar, Avalanche). The goal is singular: to get more transaction traffic flowing through its network. Visa's moat lies in its control of the merchant channel entry point. Regardless of how on-chain transactions occur, the "last mile" of fiat currency clearing remains tied to VisaNet, a single-plank bridge, allowing Visa to firmly grasp the power to collect tolls. As of November 30, Visa's stablecoin settlement pilot program had reached a milestone of $3.5 billion in monthly transaction volume annualized, representing a year-on-year increase of approximately 460%.

Traditional process:

But if Visa does not participate:

User → Stablecoin Wallet → Merchants Directly Accept USDC → Visa Bypassed ✗

For Circle, this partnership solidifies its institutional endorsement as a top-tier compliant stablecoin and opens up a crucial channel from crypto-native users to traditional financial institutions. However, due to the extremely high liquidity and short holding period of these settlement funds, their contribution to Circle's interest income in the short term is negligible. According to blogger Didier's estimate, the resulting "working stock balance" accounts for only about 0.09% of the current total USDC issuance.

Therefore, the short-term value of this partnership lies in "laying the pipeline," while its long-term potential depends on whether the flow of funds through this pipeline can significantly increase in the future, thereby bringing Circle more substantial revenue from deposited funds. Simply put, Circle is actively "making friends" to expand the usage of USDC. On the trading asset side, we have seen USDC integrated with trading platforms such as Kraken, Fireblocks, and Hyperliquid, which cater to retail, institutional, and on-chain users. Simultaneously, the company is accelerating its collaborations with banking infrastructure and digital dollar retail platforms. These initiatives collectively enhance Circle's network effect and the breadth of its application scenarios, laying a solid foundation for the transformation of its future revenue model.

▲ Source: Circle Q3 Earnings

III. Strategic Transformation in 2026: From "Minting" to "Ecosystem"

▲ Source: Circle's 2025 Year in Review

In our previous analysis of the financial statements, we mentioned that Circle's most pressing need was to expand its other revenue streams, and we also briefly touched upon CCTP. From Circle's strategic plan announced in 2026, we can clearly see its strategy for breaking through this predicament.

Among these, I personally believe that the two income categories with the best chance of improvement in the relatively short term are:

• Transaction service fees: This includes minting/redemption fees, large transfer fees, etc. To understand the potential of this revenue stream, we must look at the macro data behind it: This year, the total transaction volume of the USDC stablecoin network reached a staggering $4.6 trillion. By providing large-scale minting and redemption services for USDC to exchanges and institutions through Circle Mint, charging transaction fees of 0.1%-0.3%, this business generated $3.2 million in revenue in Q3 2025. Among these, the self-developed CCTP cross-chain and technology service, which supports seamless USDC transfers across 23 public chains and charges a fee of 0.05% of the cross-chain amount, contributed $2.8 million in revenue in Q3 2025.

• RWA's tokenization service acquired Hashnote's tokenized Treasury bond fund, USYC, charging a 0.25% annual management fee. The fund currently manages $1.54 billion. When the acquisition took place in January of last year, over 97% of the USYC tokenized Treasury bond fund was purchased and held by Usual Protocol as reserve assets for its USD0 stablecoin. However, after the acquisition, Circle is introducing USYC to more exchanges and other distribution channels, amplifying its role as a compliant interest-bearing asset.

  One of the most notable recent developments is Deribit's integration with USYC. Deribit, a leading crypto derivatives exchange, now supports USYC as collateral for cross-margin trading of futures and options.

  This integration brings multiple advantages:

• Collateral can not only protect trading positions but also generate returns.

• Compared to using stablecoins with no yield, the opportunity cost is lower.

• The appreciation of collateral may reduce overall transaction costs.

• Maintain liquidity; funds can be withdrawn whenever needed.

For active traders, this means that your "idle" trading funds can continue to generate returns for you even when held as margin—something that traditional margin trading models cannot achieve.

Looking at the bigger picture, the two categories of Circle's other income streams that offer the best long-term prospects for growth are:

First, Circle is building its own Arc public blockchain: the ARC public testnet is now live, with over 100 companies worldwide participating in the testing, including many well-known large institutions. Management anticipates the mainnet will officially launch in 2026. All participants in the developer ecosystem can seamlessly access this infrastructure, and the blockchain will also be deeply integrated with Circle's various platforms. Furthermore, management is actively exploring the possibility of launching a native ARC token.

▲ Source: Circle Q3 Earnings

Its core meaning is:

1. Vertical integration: Trading medium (USDC) + Channels (Coinbase, Visa) + Settlement layer (ARC public chain)

2. Value capture and recovery: In the past, USDC ran on Ethereum and Solana, and its Gas, MEV, and ecosystem value were taken by other public chains; ARC allows Circle to take back this value.

▲ Source: Circle

Second, CPN (Circle Payments Network): a B2B payment network for institutions, providing cross-border payment and settlement services based on USDC for large enterprises and financial institutions.

If ARC is the underlying operating system, then CPN is the top-level application. Currently, it offers three main products: CPN Console, CPN Marketplace, and CPN Payouts.

What does CPN aim to disrupt?

• Traditional cross-border payment chain: SWIFT + correspondent banks + local clearing systems (such as ACH in the United States)

• If stablecoins are used for clearing and settlement, all the above intermediate steps can be eliminated—the CPN directly maintains the ledgers of all participants within the network.

• In contrast, while Airwallex bypasses SWIFT and correspondent banks (by pre-depositing funds in various countries), it still relies on local clearing systems and requires opening a bank account.

• CPN's ultimate vision: No need for even a bank account.

Although CPN has accumulated approximately 500 potential clients, management has made it clear that the current goal is not monetization, but rather focusing on user quality and continuously expanding the network scale. Once the network effect is established, there will be ample room to charge fees significantly lower than traditional models—this is the core of Circle's second growth curve.

IV. Conclusion: Circle's competitive advantage and long-term value

Circle has demonstrated a significant competitive advantage in the stablecoin sector. Its core value stems not only from USDC itself, but also from the payment and settlement ecosystem it has built. The future stablecoin market may exhibit a "winner takes most" pattern, and Circle has already established its leading position through three key competitive advantages:

1. Network effects: USDC boasts the widest coverage and best interoperability, forming a powerful ecosystem flywheel. Users or merchants who do not connect to USDC may incur significant opportunity costs.

2. Liquidity Network: USDC boasts the most comprehensive and extensive integrated liquidity network, providing strong support for trading and settlement.

3. Regulatory Infrastructure: Circle has obtained 55 regulatory licenses, making it the most compliant stablecoin currently available, building a strong compliance moat. In the United States, legislation like the Genius Act and a clear regulatory framework provide Circle with significant compliance certainty, a feature lacking in many other crypto companies.

▲ Notebook LLM Generated

With the stablecoin market projected to reach a total issuance of $2 trillion by 2030, Circle is poised to maintain its dominant position in the digital dollar ecosystem, leveraging its core competitive advantages and execution capabilities. Despite challenges such as a low-interest-rate environment, a singular revenue model, and high revenue-sharing costs, Circle is shifting its business model from a simple interest rate spread model to one centered on USDC as its core network services and infrastructure. While its highly compliant approach may increase operating costs in the short term, it will solidify its regulatory advantages in the long run, enabling it to capture value from global traditional financial and institutional markets.

This logic is similar to the mobile payment landscape in China: WeChat Pay and Alipay dominate almost all daily payment scenarios. If a merchant doesn't integrate with these two payment tools, they will miss out on a large number of customers, severely impacting their revenue. This also explains why emerging payment methods, such as Douyin Pay, struggle to expand rapidly in a short period—even with powerful product features, without a user base and merchant network integration, it's difficult to reach a critical mass and initiate an ecosystem flywheel.

Similarly, USDC has already established a similar "first-mover advantage" in the digital dollar payment and settlement ecosystem, with its network effects and interoperability making it difficult for new competitors to shake its existing position. For merchants and institutions, accessing USDC is not only a convenience for transactions, but also a necessary condition for market entry.

In other aspects, Circle's business model has very high marginal benefits and scalable revenue.

The interest income generated by the reserves of stablecoins scales rapidly as their issuance grows, while their operating costs grow much more slowly, resulting in extremely high profit margins.

Circle's leadership in weathering numerous crises has earned its team widespread recognition. During the 2023 USDC decoupling crisis caused by the SVB, it demonstrated its strong crisis management and execution capabilities. When Silicon Valley Bank (SVB) collapsed in 2023, Circle held a portion of its USDC reserves with SVB. The market was concerned about the safety of the 1:1 USD reserve for USDC, resulting in a brief decoupling of USDC (falling below $1). Circle's key actions at that time included:

• Quickly disclose the facts: clearly state how much capital is exposed to SVB, rather than being vague.

• Continuously update information: Keep the market informed of the latest developments, instead of becoming "out of touch".

• Clearly committing to the outcome: emphasizing that even in the event of losses, Circle will guarantee a 1:1 redemption of USDC.

The team successfully stabilized market confidence through decisive and transparent communication. The company is also recruiting experienced leadership team members; its latest president in 2025 is Health Tarbert, the former chairman of the CFTC, who previously held high-ranking government positions such as Assistant Secretary of the U.S. Treasury before joining Circle.

From a short-term perspective, Circle still faces certain structural and market-level pressures. First, as global monetary policy gradually enters a rate-cutting cycle, lower interest rates will directly compress Circle's core revenue source of interest from reserves, significantly amplifying its sensitivity to changes in macroeconomic interest rates in the short term. Simultaneously, the company's current revenue model is relatively singular, heavily reliant on the size and interest rate level of USDC, lacking a sufficiently diversified buffer of non-interest income. Second, to maintain the circulation scale and network effect of USDC, Circle needs to pay a high percentage of revenue sharing costs to distribution channels such as exchanges and payment platforms, which may further erode profit margins during periods of slowing growth.

At the market level, the stock price has been weakening recently and trading below the 50-day moving average, remaining around $80 per share, reflecting cautious short-term investor sentiment and continued technical pressure. The main reason stems from the unlocking of shares after December 2, 2025, 180 days after the IPO date. The scale of this unlocking is enormous, representing a full-circulation level impact. Before the unlocking, the publicly traded shares accounted for only about 17.2% of the total share capital. After the unlocking, theoretically, almost all shares can be traded, instantly increasing the circulating shares by nearly 400%. The selling pressure after the unlocking mainly comes from early investors and management, whose holding costs are mostly below $10. Insiders can continue to reduce their holdings through the 10b5-1 trading plan. For example, director Patrick Sean Neville sold 35,000 shares at $90 per share on December 12, 2025.

Beyond that, Circle's biggest short-term risk lies in the fact that many investors will choose to short Circle during periods of declining interest rates, using it as a hedge against interest rates. However, Circle's potential growth lies in its diversified ecosystem. Circle is not only the issuer of USDC, but it is also building a comprehensive fintech ecosystem encompassing payments, trading, and Web3 services, which will help increase its revenue streams and lock in users.

Overall, Circle's long-term value is clear, but short-term volatility needs to be tolerated, as technical and macroeconomic uncertainties may lead to continued fluctuations. In summary, Circle's current share price is somewhat undervalued relative to its intrinsic value. Currently, Wall Street's DCF model gives an intrinsic value range of $142 per share, higher than the current market price, indicating a certain margin of safety in terms of fundamentals. It is worth noting that due to Circle's stable cash flow, clear regulatory position, and relatively controllable risk exposure, Circle's WACC is only 4.02%, a level closer to that of low-risk, highly predictable cash flow utility companies than typical high-volatility technology or crypto companies, reflecting that the capital market has viewed its core cash flow as a stable and defensive asset.