Circle, the issuer of the worlds second largest stablecoin USDC, has officially launched its listing plan and is preparing to be listed on the New York Stock Exchange. On April 2, the company submitted a prospectus to the SEC, taking the first step in its long-awaited IPO. The S-1 document does not specify an IPO timetable, but companies can usually start trading within a few weeks after submitting the S-1. According to the S-1 prospectus , JPMorgan Chase and Citi will serve as lead underwriters, and the market expects Circles valuation to reach US$5 billion, with the stock code CRCL. The prospectus shows that Circle will issue an unspecified number of Class A common shares, and existing shareholders will also register to sell part of their holdings. The price range per share has not yet been determined. The proceeds from the companys sale of shares will belong to Circle, and the proceeds from the sale of shares by existing shareholders will not be included in the company.
This is Circles second attempt to go public. At the end of 2022, it tried to enter the capital market by merging with a SPAC (special purpose acquisition company), but it ultimately failed due to regulatory issues and lost more than $44 million. Since then, Circle has adjusted its strategy and gradually moved closer to financial centers. Last year, it moved its headquarters from Boston to One World Trade Center in New York, further integrating into the global financial core circle.
This time, Circle chose a delicate time - technology stocks have fluctuated sharply recently, and the Nasdaq index has just experienced its worst quarter since 2022. If successfully listed, Circle will become another heavyweight cryptocurrency company to land on a mainstream US exchange after Coinbase, and also the first stablecoin listed company.
Ecological closed loop with continuous profit pressure
Circles story began in 2013, when it was positioned as a company focused on Bitcoin-related businesses, with the goal of making digital currencies more convenient to use through technology. As the crypto market changes, Circle seized a new opportunity in 2018 - partnering with Coinbase to launch the US dollar stablecoin USDC through the Centre Alliance. USDC is a digital asset pegged 1:1 to the US dollar, designed to provide stability and credibility for crypto transactions.
In 2023, the Centre Alliance was dissolved and Circle gained full control of USDC. From then on, USDC was no longer just a cooperative project, but Circles core asset. As of 2025, USDCs market value has reached $60.1 billion. Although it still lags behind Tethers USDT (market value of $144.4 billion), its growth momentum and transparency have given it a place in the market.
USDC is Circles most well-known product, the worlds second-largest stablecoin. USDC rose rapidly in the last round of crypto bull market, with its market value soaring from less than $1 billion in 2020 to over $50 billion in 2022, and further growing to $60.1 billion in 2024, accounting for 26% of the entire stablecoin market. Although the leader Tether (USDT) is still far ahead with a market share of 67%, USDC has grown rapidly this year - its market value has increased by 36%, while Tether has only 5%.
Data source: CryptoQuant
Related reading: Circle IPO sprints to a valuation of US$5 billion, is there a concept stock for stablecoins?
Channel distribution costs are too high and gross profit margin continues to decline
Circle is well aware that USDCs success is inseparable from ecological support. Initially, it and Coinbase jointly issued USDC through the Centre Alliance, but the alliance was dissolved in 2023 and Circle took over. The S-1 disclosed that Coinbase now holds a minority stake in Circle, and the two parties divide profits more evenly based on total reserve revenue (still divided according to the USDC holdings in their respective wallets and custody products). Circle earned approximately $1.7 billion in revenue in 2024 and paid Coinbase more than $900 million as a distribution partner.
In December 2023, Circle reached a cooperation with Binance, the worlds largest cryptocurrency exchange, paying a one-time fee of US$60.25 million and a certain percentage of fees on a monthly basis to allow USDC to participate in the Binance Launchpool, causing the supply of USDC on the Binance platform to increase from less than US$1 billion to US$4 billion.
This strategy of spending money to buy growth has significantly increased the circulation and market recognition of USDC, but it has also increased operating costs. Circle has built a strong distribution network through cooperation with giants such as Coinbase, Binance, and BlackRock to ensure the penetration of USDC in the global crypto ecosystem.
Institutional network becomes the main moat
Circles business model can be described as stablecoin + ecological expansion. It is not only a stablecoin issuer, but also attempts to build an ecosystem covering encrypted payments, cross-chain technology and even enterprise solutions through a series of products and services.
The issuance and circulation of USDC is Circles core business and its most important source of income. For each USDC issued, Circle will deposit an equivalent amount of U.S. dollars or highly liquid assets in the bank as reserves to ensure its stable value. Users can use USDC for transactions, payments or deposits, and Circle earns income by managing these reserve assets. In order to expand the circulation of USDC, Circle has established in-depth cooperation with financial and crypto giants such as Coinbase, Binance, and BlackRock. For example, in the agreement with Coinbase, Circle will set the payment base based on the daily net income of the USDC reserve, and the two parties will share it in proportion after deducting the management fee. As of 2024, the circulation of USDC continues to grow, especially in the fields of DeFi and cross-border payments.
In terms of payment and enterprise services, Circle plays the role of a bridge between the crypto world and traditional business. It provides a complete set of payment APIs and enterprise-level tools that enable merchants to easily accept USDC payments and automatically convert them into fiat currency. This service model is similar to PayPal in traditional finance, but optimized for the crypto economy. For example, e-commerce platforms can integrate Circles Checkout service. After consumers pay with USDC, Circle will convert cryptocurrencies into US dollars in real time and settle with merchants, greatly reducing the threshold for companies to get involved in crypto payments.
Cross-chain technology and blockchain infrastructure are another key barrier built by Circle. The cross-chain bridge developed by the company allows USDC to flow freely between different blockchains such as Ethereum and Solana, greatly improving the usability of stablecoins. In addition, the prospectus revealed that Circle is developing Layer 2 solutions to reduce transaction costs and improve efficiency, and lay out encryption infrastructure.
In order to reach end users more directly, Circle has also launched a digital wallet service. Although the scale is currently limited, it can be seen that the business is extending from the B-end to the C-end.
To sum up, Circles business model is like a stablecoin-driven ecological closed loop: with USDC as the core, it extends the potential of cryptocurrency to the real world through payment, technology, and user services. Its ambition is not small, covering almost all crypto fields outside of CEX.
Where did the $1.68 billion in revenue come from last year?
According to the prospectus, the financial data disclosed this time fully presents Circles performance in recent years for the first time.
Total revenue and reserve income for fiscal year 2023 (ending December 31) reached $1.68 billion, a year-on-year increase of 16%, and continued growth from $1.45 billion in 2022 and $772 million in 2021. Revenue in 2024 mainly came from interest income on reserve assets supporting USDC.
Total operating expenses in 2024 are $491.7 million, of which salary expenses ($263.4 million), administrative expenses ($137.3 million) and IT infrastructure investment ($27.1 million) account for the majority. Net profit from continuing operations is $156.9 million, which is lower than the $271.5 million in 2023, but significantly improved from the loss of $761.8 million in 2022. Adjusted EBITDA in 2024 is $284.9 million.
The company also recorded a $4.3 million digital asset impairment loss that year, and $54.4 million in other income from non-core business gains. The prospectus has not yet finalized the weighted average number of outstanding shares and earnings per share data.
According to the plan, Circle intends to use the funds raised from the IPO for conventional corporate purposes such as product development, operating capital, scale expansion and potential acquisitions. The specific pricing schedule and share allocation plan have not yet been announced.
Operational and financial metrics
Circle makes money by managing USDCs reserve assets. These reserves include cash and short-term U.S. Treasuries, which generate substantial interest income in a high-interest environment. S-1 shows that Circles total revenue in 2024 is $1.68 billion, of which 99% (about $1.665 billion) comes from reserve income, and other sources (such as payment services and cross-chain technology) contribute only $15 million. This means that Circle is almost entirely dependent on a single source of income and is affected by government interest rate policies. The document estimates that if interest rates fall by 1%, reserve income will decrease by $441 million. However, Circle believes that low interest rates may stimulate growth in USDC circulation, but this relationship is complex, uncertain and unproven.
As of December 31, 2024, USDC has been used for approximately $20 trillion in on-chain transactions. The following table sets forth key operating and financial metrics for the periods indicated, along with the relevant GAAP (U.S. Generally Accepted Accounting Principles) metrics:
USDC circulation and average USDC circulation are the main contributors to Circles reserve income and an indicator of the breadth of Circles stablecoin ecosystem. As of December 31, 2024, December 31, 2023, and December 31, 2022, the company held USDC of $294.5 million, $275.8 million, and $5.3 million, respectively.
The Reserve Return Rate is the rate of return generated by reserve assets and is the primary determinant of reserve income. It is calculated by dividing reserve income by the average period balance of Circles exclusive reserves for stablecoin holders. As of December 31, 2024, December 31, 2023, and December 31, 2022, the Companys Reserve Return Rates were 5.0%, 4.7%, and 1.5%, respectively.
Stablecoin Market Share refers to the proportion of Circle stablecoins in circulation to the total circulation of all fiat-backed stablecoins (digital assets anchored to the value of fiat currencies). This metric reflects the share of Circle stablecoins in the entire stablecoin market and its position in the competitive landscape. Since 2021, Circle has been the second largest stablecoin issuer in the world by circulation. According to CoinMarketCap data, as of December 31, 2024, Circles stablecoin market share was 24%.
Meaningful Wallets refers to the number of digital asset wallets with an on-chain USDC balance of more than $10, which is an important indicator for measuring the breadth of USDC adoption. The number of valid wallets in 2024 is 4.26 million, an increase of 53.24% from the end of 2023.
Profit breakdown
The following table is the 2024 income statement of Cirlce Company, which records in detail the companys various income, expenses and net profit indicators in 2024:
As of December 31, 2024, reserve revenue was $1.676 billion, an increase of $230.5 million (16.1%) from 2023. Of this, approximately $139.9 million of the increase came from the increase in the average daily balance of USDC in circulation, reflecting the increase in USDC demand related to digital asset trading activities and Circles increased market share in key markets; $89.9 million of the increase came from the increase in average yield, mainly affected by the Federal Reserves interest rate hikes. Other revenues in 2024 decreased by $4.7 million (23.6%) year-on-year, mainly due to a decrease of $3.9 million in transaction service revenue, which was related to the gradual decommissioning of certain services in 2024.
Distribution and trading costs for the year ended 2024 increased by $291 million (40.4%) compared to the year ended 2023, primarily due to an increase of $216.6 million in distribution costs paid to Coinbase and an increase of $74.1 million in other distribution incentive costs related to new strategic distribution partnerships, such as an upfront one-time fee paid to Binance. Other expenses for the year ended 2024 decreased by $1.4 million (17.2%) compared to the year ended 2023, primarily due to a $0.9 million decrease in related expenses as the Company discontinued its legacy trading services products.
The annual profit in 2024 was US$156 million, a decrease of US$112 million compared with the net income in 2023. Although the reserve income in 2024 increased by US$230.5 million year-on-year compared with 2023, the distribution and transaction costs also increased significantly by US$291 million compared with the end of 2023, and the total operating expenses increased by US$39 million, which ultimately led to a downward trend in profits.
In terms of cash flow, for three consecutive years from 2022 to 2024, the cash balance of USDC reserves deposited in bank accounts far exceeded the FDIC insurance limit of $250,000 per financial institution. As of December 31, 2024, approximately 85% of USDC reserves were deposited in the Circle Reserve Fund, and the rest was deposited in cash in several bank accounts. The Circle Reserve Fund is managed by BlackRock. The fund is only available to Circle, and Circle is the only shareholder of the Circle Reserve Fund.
In terms of financing, in 2024, the funds raised from financing were US$19.4499 billion, while in 2023, the funds raised from financing were -US$20.3222 billion, mainly due to the increase in USDC in circulation in 2024, and the net change in deposits of stablecoin holders increased by US$19.4521 billion; while in 2023, the USDC in circulation decreased, and the net change in deposits of stablecoin holders decreased by US$20.3222 billion.
Excessive salary spending is questioned. Are executives the real winners of IPOs?
Circles IPO is not only about the companys future, but also a feast for capital. After Circle goes public, it will implement a three-level equity structure: Class A shares issued in the IPO have 1 vote per share; Class B shares held by co-founders Jeremy Allaire and Patrick Sean Neville have 5 votes per share, but the total voting rights do not exceed 30%; Class C shares have no voting rights and can be converted under certain conditions. Class B shares will automatically convert to Class A shares when transferred through unauthorized channels.
In addition, according to the prospectus, the executive compensation of CEO Jeremy Allaire is $900,000 per year, $9 million in stock awards, plus $2 million in benefits, with a total compensation of over $12 million. Chief Financial Officer Jeremy Fox-Geens total compensation is $5.2 million (annual salary of $500,000 + stock of $4 million + benefits of $700,000). Other executives such as Chief Strategy Officer Elisabeth Carpenter, President and Chief Legal Officer Heath Tarbert, and Chief Product and Technology Officer Nikhil Chandhok have annual compensation between $4 million and $5 million. Working at Circle is obviously very rewarding.
For venture capital giants, investors holding more than 5% of the shares will make a fortune, including General Catalyst (the largest corporate shareholder), Beijing IDG Capital, Breyer Capital, Accel, Oak Investment Partners and Fidelity. These institutions hold more than 130 million shares in total, and the IPO with a valuation of US$4 billion to US$5 billion will bring them considerable returns.
USDCs market value has doubled in the past year, from about $30 billion to $60 billion, but market competition is increasingly fierce. Its main rival Tether (USDT) is far ahead with a market value of over $140 billion. In addition, PayPal will launch its own stablecoin in 2023, and banking giants such as JPMorgan Chase are also exploring the blockchain field. In the S-1 document, Circle listed these competitors and admitted that the market environment is complex.
Despite this, Circle is optimistic about the future. The US legislation process for stablecoins has accelerated, with the GENIUS Act and the STABLE Act attracting much attention. Bryan Steil, chairman of the House Digital Assets Subcommittee, said that after deliberation on April 2, the two bills are expected to be consistent after revision and are scheduled to be sent to the president for signature within the first 100 days of the Trump administration. This progress provides policy benefits for compliant stablecoin companies such as Circle, and also marks that the US regulatory framework in the field of digital dollars is becoming increasingly clear.
This IPO still needs to pass regulatory review and proceed depending on market conditions. The specific issuance size, per-share valuation and other details will be disclosed through supplementary documents before listing. Although there are still all kinds of uncertainties, Circles IPO is likely to be a key signal for the future direction of the stablecoin industry. As global regulatory policies become clearer, stablecoins are moving towards an era of compliance and deep institutional participation. Can Circle seize this opportunity and challenge Tethers long-standing throne with the abundant capital flow brought by Wall Street to the crypto market? Faced with multiple challenges of regulation, competition and market volatility, can Circle deliver on market expectations? All this still needs time to prove.
