The Circle IPO seems to be overvalued bc there’s so much demand for exposure to stablecoin growth and there’s not many options to get exposure, especially for more traditional investors 

Coinbase gets 100% of the revenue from $USDC held on its platform. 50% for all other residual revenue from $USDC reserves 

Coinbase is better placed to earn from the gain in USDC market cap than Circle itself us. 

This will be true for the next few years at minimum. According to Coinbase’s 2024 report, the agreement that began in 2022 runs for an initial term of three years. 

After that, Coinbase and Circle will “discuss in good faith whether any modifications to the Circle Agreement are warranted.” If no new terms are agreed upon, the deal automatically renews for another three years—unless either side fails to meet its obligations.

With all of that said, Circle could essentially become a meme stock for stablecoin growth and get a valuation far beyond its current fundamentals

Stay Curious // iixii // Head of Crypto at https://www.lazertechnologies.com/  // Prev: CoinDesk, Roc Nation // based @basedevo

Well put. Circle’s valuation seems driven more by narrative than fundamentals right now. With Coinbase capturing the lion’s share of USDC revenue, it’s arguably the more direct and profitable exposure to stablecoin growth, at least under the current agreement. Unless Circle pivots or renegotiates more favorable terms, the hype might outpace its actual earnings potential.