Is Circle Internet Financial Still a Buy in 2025? Assessing Undervaluation Amid Macroeconomic Shifts and Stablecoin Growth

In 2025, the question of whether Circle Internet Financial (CRCL) remains a compelling investment hinges on two critical forces: the normalization of macroeconomic conditions and the explosive growth of stablecoin adoption. While the company's Q3 2025 financial results revealed a quarterly loss of ($4.48) per share-far below analysts' expectations-its revenue surged 53% year-over-year to $658 million, underscoring a paradox of profitability challenges amid robust top-line growth, as a Coinmonks analysis explains. This divergence between earnings performance and market dynamics demands a nuanced analysis of valuation metrics, regulatory tailwinds, and macroeconomic headwinds.

Financial Performance: Growth vs. Profitability

Circle's Q3 2025 results highlight a revenue-driven but unprofitable model. Despite a 53% YoY revenue increase, the company reported a net loss, resulting in a trailing twelve-month (TTM) P/E ratio of -81.47, according to The Currency Analytics. This negative multiple reflects the drag of interest rate normalization, which directly impacts Circle's reserve income. In 2024, Circle generated $1.6 billion in reserve income from USDC, but falling interest rates in 2025 threaten to erode this revenue stream, per CoinCentral. For context, the fintech industry's average EV/EBITDA multiple for companies with $1–5 billion in revenue is 12.1x, per the Windsor Drake report, while Circle trades at a staggering 105.5x EV/EBITDA, according to multiples.vc public comps. Such a disconnect suggests either excessive optimism about future growth or a mispricing of current risks.

However, Circle's price-to-sales (P/S) ratio of 37.8x appears more defensible when compared to broader market benchmarks. The Information Technology sector's P/S ratio for high-growth companies typically exceeds 40x, according to Siblis Research, implying that Circle's valuation is in line with peers in innovation-driven industries. This metric gains further justification from USDC's market dominance: with $74 billion in circulation as of Q3 2025 (per multiples.vc), Circle holds a 25% share of the $300 billion stablecoin market (per CoinCentral), a position that could compound as adoption accelerates.

Macroeconomic Normalization: A Double-Edged Sword

The Federal Reserve's 2025 policy framework, which reemphasized a 2% inflation target and signaled rate cuts, is summarized in an ABA Banking Journal review, and creates both challenges and opportunities for Circle. On one hand, declining interest rates will reduce the yield on USDC reserves, which currently generate over 50% of Circle's income (per CoinCentral). On the other, normalization is expected to boost risk assets, including fintech equities, as investors reallocate capital toward growth sectors, as a Forbes 2025 outlook projects. This duality positions Circle as a speculative play: its valuation hinges on whether it can offset falling interest income with reserve expansion and diversified revenue streams.

The company's strategic response to this dynamic is critical. Projections suggest USDC reserve income could reach $2.44 billion by year-end 2025 (per CoinCentral), but Circle retains only half of this under its revenue-sharing agreement with Coinbase. To justify its $29.9 billion market cap (per multiples.vc), Circle must either renegotiate these terms or expand into higher-margin use cases, such as tokenized assets or institutional treasury services.

Stablecoin Adoption: Regulatory Clarity as a Catalyst

The passage of the GENIUS Act in July 2025 (reported by CoinCentral) has been a game-changer for stablecoin issuers. By establishing federal reserve requirements and direct Fed oversight, the legislation has spurred institutional adoption, with USDC seeing $45.6 billion in Q3 net inflows (per The Currency Analytics). This regulatory clarity has also differentiated Circle from competitors like Tether, whose reserve transparency has faced scrutiny. As of August 2025, USDC's market share grew 6.4% quarter-over-quarter to $65.2 billion (per multiples.vc), reflecting trust in Circle's compliance-first approach.

Moreover, stablecoins are increasingly embedded in global financial infrastructure. In Q3 2025, stablecoin transaction volumes hit $3 trillion, driven by cross-border payments, DeFi liquidity, and e-commerce adoption (per The Currency Analytics). For Circle, this trend validates its thesis that USDC will serve as a "bridge between crypto and traditional finance," a narrative that could drive long-term demand even as short-term earnings lag.

Valuation Realities and Risks

While Circle's valuation multiples appear stretched relative to traditional fintech benchmarks, they align with the expectations for high-growth crypto-native companies. The stablecoin sector's projected 55–60% CAGR (per CoinCentral) and Circle's 25% market share justify an optimistic 2028F P/EBITDA multiple of 15x under a bullish scenario (per the Coinmonks analysis). However, this outlook depends on macroeconomic stability and regulatory continuity-both of which are uncertain. Geopolitical risks, such as U.S.-China trade tensions (noted in the Forbes 2025 outlook), could disrupt capital flows and dampen stablecoin demand.

Conclusion: A Speculative Buy with Caveats

Circle Internet Financial remains a buy for investors with a high-risk tolerance and a long-term horizon. Its undervaluation relative to stablecoin growth potential is evident, but the path to profitability is fraught with macroeconomic and regulatory uncertainties. The key question is whether Circle can diversify its revenue streams and scale USDC adoption fast enough to offset falling interest income. For now, the company's strategic positioning in a $300 billion market and regulatory tailwinds make it a compelling, albeit volatile, investment.