Circle's Market Cap Surges 750% to $77 Billion on USDC Demand

Circle Internet Financial, the issuer of the stablecoin USDC, has seen its market capitalization surge to approximately $77 billion, nearly matching that of Coinbase. This significant increase in valuation comes as the company's stock, CRCL, has climbed by nearly 750% since its initial public offering (IPO) on June 5. The stock closed at $263 on Monday, after reaching a high of $298 during early trading, marking a substantial gain from its IPO price of $31.

The surge in Circle's market cap is closely tied to the growing demand for stablecoins, particularly USDC, which is the second-largest dollar-backed token with a market capitalization of around $61.3 billion. This alignment between Circle's corporate valuation and the total USDC in circulation has garnered attention from market analysts, highlighting the company's strong position in the stablecoin sector.

A key factor driving this rally is the U.S. Senate's approval of the GENIUS Act, which advances federal rules for fully-backed stablecoins. The bill, pending further action from the House, has been linked to future market growth and has sparked investor interest in both Circle and Coinbase stocks. President Donald Trump has expressed his desire to finalize the legislation by August, further fueling market optimism.

Circle's current valuation places it among major financial technology players, including Robinhood, Nubank, and Block. However, Circle is trading at significantly higher valuation multiples. According to Artemis CEO Jon Ma, Circle trades at 32 times revenue, 80 times gross profit, 152 times EBITDA, and 285 times earnings. This high valuation reflects the market's enthusiasm for Circle's growth prospects and its role in the stablecoin ecosystem.

The rise in Circle's valuation also casts a spotlight on Coinbase, which receives about 50% of the interest income from USDC reserves. This revenue-sharing agreement ensures that Coinbase benefits from any increase in USDC supply or front-end yields, further strengthening its financial position. According to public filings, Circle paid over 60% of its gross USDC reserve income to Coinbase in 2024, underscoring the symbiotic relationship between the two companies.

Retail interest in CRCL has been a significant driver of its upward trend since the IPO. The rally has drawn comparisons to other high-momentum stocks, although analysts believe that the recent moves may not fully align with underlying business fundamentals. Coinbase, with its broader revenue streams and diverse operations, remains a formidable player in the market. However, Circle's rapid climb in valuation places it on nearly equal footing with Coinbase and USDC's market size, highlighting its growing influence in the stablecoin sector.

As the market continues to evolve, several analysts expect that valuations across the sector may realign as excitement stabilizes. Despite the current high valuation multiples, Circle's strong position in the stablecoin market and its strategic partnerships with companies like Coinbase position it well for future growth. The company's ability to capitalize on the growing demand for stablecoins and its innovative approach to financial technology will be key factors in determining its long-term success.