Circle Reports 53% Revenue Surge, USDC Circulation Exceeds 65 Billion

Circle, the issuer of the second-largest dollar-pegged stablecoin USDC, has released its first quarterly financial report since going public in June. The report reveals a 53% year-over-year increase in total revenue and reserve income, reaching 6.58 billion dollars. This growth is primarily driven by the significant increase in the circulation of USDC, which exceeded analyst expectations of 6.473 billion dollars.

Despite a net loss of 4.82 billion dollars in the second quarter, the company attributes this to two non-cash expenses related to its initial public offering (IPO). These expenses include the cost of employee stock awards granted at the time of the IPO and the increase in the valuation of convertible bonds due to the rise in stock prices. The majority of Circle's revenue comes from interest income, particularly from short-term government bonds that back its stablecoin USDC.

Over the past three years, the company's income from managing stablecoin-related reserves has grown from 7.359 billion dollars in 2022 to 14 billion dollars in 2023, and further to 17 billion dollars in 2024. These figures represent 95.3%, 98.6%, and 99.1% of Circle's total operating income, respectively. However, the latest financial report indicates a 1.03 percentage point decrease in the reserve return rate to 4.1%, reflecting the impact of changes in the interest rate environment on profitability. Additionally, the average daily weighted proportion of USDC on the platform is 7.4%, although this represents a 5.36 percentage point increase year-over-year, the absolute level remains relatively low, indicating that most USDC circulation occurs on third-party platforms.

As of June 30, the circulation of USDC has increased by 90% compared to the same period last year, reaching 61.3 billion dollars. This has led to an increase in Circle's market share in the fiat-backed stablecoin market to 28%. According to the latest data, as of August 13, the circulating market value of USDC has exceeded 65 billion dollars, making it the second-largest stablecoin by market value, behind only Tether's USDT (165 billion dollars). Despite the gap in market share, Circle's compliance background and high transparency in disclosing dollar assets are attracting more traditional merchants and payment networks to include stablecoins in their settlement systems.

On July 18, the United States President formally signed the "Guidance and Establishment of the United States Stablecoin National Innovation Act" (GENIUS Act) at the White House, marking the beginning of the implementation phase of stablecoin regulatory legislation in the United States. Analysts point out that the passage of the GENIUS Act is a significant positive development for Circle's long-term compliance status. As the first stablecoin issuer to obtain regulatory compliance approval, Circle's competitive advantage in the new regulatory environment may be further solidified.

Since its listing, Circle's stock price has surged by over 96%, currently trading at 163 dollars per share. Analysts from Seaport Research highlight Circle's leadership position in the stablecoin sector, describing it as the purest stablecoin on the public market. As the company continues to create new opportunities for itself and its partners, analysts expect its stock price to rise further. The analyst maintains a "buy" rating on the stock with a target price of 280 dollars.