Circle's Valuation Surges 80% on US Stablecoin Legislation

Circle Internet Financial, the issuer of the second-largest stablecoin USDC, has achieved a market valuation of $66.9 billion, surpassing the entire $61.3 billion circulating supply of its own dollar-pegged token. This significant rise in valuation is attributed to growing investor confidence, which has been bolstered by pivotal U.S. stablecoin legislation. The company's market capitalization peaked at just under $67 billion, outpacing the $61.3 billion supply of USDC currently in circulation. This milestone comes on the heels of the U.S. Senate's decisive vote on June 17 to pass the GENIUS Act, which, once signed into law, will establish the United States' first federal framework for dollar-pegged crypto assets. The legislation mandates full backing, regular audits, regulatory approval for issuers, and limits on algorithmic stablecoins, while also paving the way for banks, fintechs, and potentially major retailers to enter the market.

Investor reaction to these developments has been swift and positive. Circle's shares surged over 80% last week alone, and the momentum continued, amplified by news that a fintech giant plans to launch its own price-stable digital asset by year-end using Circle’s infrastructure. This news has further fueled investor optimism, driving Circle's valuation closer to that of a crypto exchange giant, which has a market cap of $78 billion.

While Circle's valuation now places it within striking distance of the crypto exchange giant, concerns have been raised about a potential bubble. Critics suggest that investors may be banking heavily on future profits rather than present fundamentals, given that Circle is trading at 216x net income with a P/E ratio above 3,200. However, the uptick in Circle's valuation comes at a time when the broader stablecoin market is experiencing significant growth. A recent report revealed that fiat-linked cryptocurrencies processed $27.6 trillion in 2024, surpassing the combined transaction volumes of major credit card companies. The study also found strong interest from 81% of crypto-aware small and medium-sized businesses and tripled interest from large corporations compared to 2024.

Additionally, the latest data shows the sector’s total market cap rose by $5.671 billion in the last 30 days to push past $251 billion. Ethereum was the primary growth engine, contributing more than $3.6 billion of the new supply. Meanwhile, Tether’s USDT remains the most dominant stablecoin, with its $156 billion circulating supply making up 62% of the market. USDC’s $61.3 billion market cap gives it a 24% stake, solidifying its second-place position in the space.