What Is Circle Worth?

Using conservative assumptions, I get to $75 billion by 2030—even with the recent CLARITY Act concerns.

One of the most common questions we get is, “How do I invest in stablecoins?”

Typically, we tell people to consider crypto assets that support the stablecoin ecosystem, like Ethereum, Solana, and Chainlink, and/or crypto companies that are building in the space, like Circle and Coinbase. It’s hard to know who will benefit most from the rise of stablecoins, so there’s a good argument to just own the field.

But of all the options, one opportunity stands out: Circle, issuer of the world’s second-largest stablecoin, USDC. It’s the only publicly traded, pure-play stablecoin company. To me, it’s the most obvious choice.

So is it a good investment?

Today’s an appropriate day to answer that question because the stock is trading down sharply (it fell 20% on Tuesday) on news that the latest draft of the proposed CLARITY Act restricts platforms’ ability to pay interest income to stablecoin users. I think the reaction is overblown.

To explain why, it pays to think about Circle’s future at a 30,000-foot level.

The Three Big Questions That Define Circle’s Future

1) How Big Will the Stablecoin Market Get?

The first question is how big the stablecoin market will grow. You can find a variety of forecasts, but the most widely referenced comes from Citigroup. The report’s “base case” projects stablecoin AUM will hit $1.9 trillion by 2030. Its “bull case” is $4 trillion.

There’s nothing about the CLARITY Act news that changes the base case forecast. Interest income has not been a primary driver of stablecoin growth to date; the vast majority of stablecoins today are held in ways that don’t pay interest. Stablecoins have exploded in popularity because they let people move money anywhere in the world efficiently and reliably—for trade settlement, as collateral in lending, as an alternative to unstable national currencies, and more.

Convenience is the killer app for money, and that’s what stablecoins do best. The national average savings account today yields about 0.60%, and the national average checking account yields 0.07%. People aren’t parking their money there for the yield. If the global financial system is increasingly moving onto blockchain-based rails, I’d expect stablecoins to play a bigger and bigger role in that shift, whether or not they provide interest.

My gut tells me that the Citigroup base case is actually quite modest. Still, in the interest of taking a conservative approach, let’s use its $1.9 trillion scenario as our estimate.

2) What Share of the Market Cap Will Circle’s USDC Take?

Currently, Circle’s USDC has 25% of the stablecoin market, trailing Tether’s USDT.

(Why not invest in Tether? You can’t. It’s a private company.)

Stablecoin Market Capitalization

Source: Bitwise Asset Management with data from The Block. Data from January 1, 2020 to March 23, 2026.

Note: "Others" includes BUSD, crvUSD, DAI, FDUSD, FEI, FRAX, GHO, GUSD, LUSD, MIM, PYUSD, TUSD, USDD, USDe, USDP, and USDS.

One popular view is that Circle’s share of the market will decline over time as big firms like Bank of America, Stripe, and Wells Fargo get involved in stablecoins.

I’m not so sure. Historically, innovators do pretty well at protecting early market leads.

For instance:

• In 1976, the world’s first index fund was created by a little-known company called Vanguard. Today Vanguard manages more passive assets than anyone in the world.

• In 1993, the first American ETF, SPY, was launched by State Street—not a giant in asset management at the time. Today it remains the most-traded ETF in the world and has more than $650 billion in assets.

• In 1996, the first suite of international ETFs was launched by a no-name asset manager called Barclays Global Investors (BGI). BGI would eventually be acquired for $12 billion by BlackRock, and that little franchise would become iShares, which today boasts $5 trillion in assets.

We’ve even seen early signs that Circle can shrug off big-name competition in stablecoins: In 2023, PayPal—one of the largest digital payment companies in the world—launched a stablecoin (PYUSD) to much fanfare. But the offering fizzled, and today PYUSD has just over 1% of the market.

Of course, there are other examples where the big boys come in and crush the early movers. That happened in money market funds, for instance, where fast-followers (like Fidelity, Vanguard, and Federated Hermes) took most of the market from the original innovator (Reserve Fund Group). That’s worth noting, especially considering the similarities between money market funds and stablecoins: Both take in dollars and invest them in high-quality, short-term securities like U.S. Treasuries.

Still, I’m skeptical that big banks will crush Circle. I think it’s just as likely that Circle’s market share will expand. After all, while Circle “only” has 25% of the overall stablecoin market, it has a much larger share of the regulated stablecoin market. (Tether’s USDT dominates the offshore market.) It’s hard to get exact numbers of Circle’s share of the regulated market, but I’d estimate it to be 80%+. If you think much of the growth of stablecoin AUM will come from those markets (as banks, fintechs, and major enterprises opt for onshore, regulated stablecoins), you might expect Circle’s market share to increase well beyond its current 25% share.

But once again, for the purposes of this exercise, I’m going to play it conservative. Let’s balance these two forces and assume Circle simply maintains its 25% share into the future.

3) What Is Its Margin?

The last question is by far the most challenging and important: What will Circle earn on deposits?

Currently, Circle takes all of the interest income from the U.S. Treasuries that back USDC. At current interest rates, that means it earns roughly 4% on its $80 billion of AUM.

That number overstates Circle’s real revenue opportunity, however. You have to factor in the distribution fees Circle pays to attract AUM. For instance, USDC was co-developed by Coinbase and is the exchange’s featured stablecoin. As part of that arrangement, Circle pays Coinbase all the interest income it receives on USDC held at Coinbase, much of which Coinbase passes on to users. Circle has distribution deals with other exchanges as well. Here Circle is making the bet that paying for some distribution will jumpstart a marketing flywheel that lets it attract assets directly—at which point it can take more of the income—or that lets it monetize those assets in other ways in the future.

All told, Circle today pays roughly 60% of its revenue to distribution partners. That means its current “take rate” at today’s interest rates is around 1.6%.

Is that sustainable? There are two big factors to consider.

The first is interest rates. Circle’s interest income is directly linked to prevailing interest rates. If the Fed raises rates, that’s good for Circle; if it cuts, that’s bad.

The second is competition. If you imagine a world with hundreds of stablecoins, where consumers flit from USDC to WFUSD to BAUSD to PYUSD and so on, Circle’s ability to retain interest income will be limited. Theoretically, competition will crimp margins. Economics 101.

I’m skeptical, though. Markets that "should" be perfectly efficient often aren't. Charles Schwab earns billions per year on the spread between what it pays depositors and what it earns on their cash—even though clients could move to higher-yielding alternatives with a few clicks. But clients don't always do that because the value proposition isn't yield; it's convenience, trust, and integration. In many ways, USDC is similar: People hold it because it works everywhere and is trusted, not because of the interest rate. That kind of stickiness doesn't disappear overnight.

I’d add that the current draft of the CLARITY Act could actually benefit Circle’s margins by making it more challenging to pass on interest income to stablecoin holders.

Still, in total, I think that Circle will face more pressure on margins over time as competition grows. It may even have to morph how it derives revenue from its users, something the firm is working on aggressively. For the purposes of this exercise, I'll assume the take rate gets cut in half, to 0.8%.

Conclusion

Answering these three questions does not cover every aspect of Circle’s business. As I hinted at above, they’ve launched their own blockchain, are innovating on payments technology, and are growing non-interest revenue quickly. But I like the three-question prompt as a good 80/20 analysis of the stock.

Using my simple estimates—a $1.9 trillion market, 25% market share, and 0.8% margin—you end up with $3.8 billion in revenue after distribution costs, before other expenses. Today, the firm’s true operating expenses are relatively low—$144 million in 2025—meaning that, even if these costs double or triple by 2030, around $2.7 billion of that revenue could drop to the bottom line by 2030, post-tax. If you assign the S&P 500’s current average P/E ratio (28x), that makes Circle a $75 billion company.

It’s an interesting number, roughly double where it is today. That’s not bad—but you might ask, given the volatility, is it worth it?

I’d note that I took the conservative choice at each step of my analysis. If stablecoin growth hits Citigroup’s bull case, or Circle grows its market share (as it has done recently), or the company maintains its take rate or finds new ways to generate revenue, the numbers can get much higher.

In the end, I can imagine scenarios where Circle is worth much more than my back-of-the-envelope 2030 estimate, and scenarios where it’s worth less. What I like about the analysis is that it suggests the current valuation is reasonable. If stablecoins play out the way people think, you can be fairly conservative on most assumptions and still find Circle looking attractive.

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