Circle Surpasses Market Cap of Coinbase as Stablecoin Demand Booms: A Look at the Explosive Rally and Future Prospects for the Company and Its USDC Token
Shares of stablecoin issuer Circle (CRCL) soared to a fresh record high on Monday, extending their explosive rally since its initial public offering (IPO) and making the company worth almost as much as its flagship token's market capitalization.
The stock hit a record high of just shy of $299 in the morning, before giving back some of the advance. It closed at around $263, up 9% for the session. Since the IPO earlier this month priced at $31, shares have appreciated a whopping 750%.
At its peak, Circle's market capitalization reached roughly $60 billion, putting it nearly on par with the $61.3 billion supply of its USDC stablecoin. It also brings the firm within striking distance of crypto exchange Coinbase (COIN), which has a market cap of about $78 billion.
Circle's surge this month is a testament to the soaring investor appetite for the fast-growing stablecoin market, a crypto sector with few publicly-traded pure plays. USDC remains the second-largest dollar-pegged token in circulation and is widely used across exchanges and decentralized finance (DeFi) protocols, and increasingly popular for payments and cross-border transactions.
The rally was fueled by the U.S. Senate passing the so-called GENIUS Act last week, advancing regulation for the asset class that some believe could reach trillions over the next years.
However, some analysts warn that the rally may be running ahead of fundamentals. The company trades at eye-watering valuation multiples rarely seen among its fintech and crypto peers: 32x its revenue, 80x its gross profit, 152x EBITDA, and 285x earnings.
"Not a lot of upside in the current model," said Jon Ma, CEO of crypto analytics firm Artemis in a previous post on Thursday.
Despite the high valuation, Circle's surge shows the growing interest in the stablecoin market and its potential for future growth. With regulation advancing and the market expanding, Circle could be well-positioned to capitalize on this trend and continue its upward trajectory.
