Deep Investment Research: While everyone else is fleeing, I am gradually building a position in the mother of USDC—why?

$CRCL
In February 2026, Circle's stock price struggled in the 50-55 range.
From 18 days after IPO at 299 to here, it has fallen 83%. General Catalyst sold off 19 million shares and exited, Fidelity reduced holdings by 95.5% and exited, and ARK sold near its peak. After the lock-up period ended—everyone sold, zero buys.

All smart money is fleeing. I started building my position in February, with an average price of 53.

This is not impulsive, not a bottom-fishing gamble. It’s a systematic decision based on extensive analysis of Circle’s SEC financial reports (10K, S1, 8K), on-chain USDC data, the stablecoin competitive landscape, and cross-validation of 10 valuation methods.

Conclusion: 53 was a buy during an emotional misjudgment.

Now the stock price is 95.41, with an unrealized gain of 80%. On March 24, the CLARITY Act caused a panic sell-off of 20% (from 126 down to 101), but I didn’t sell. This is not a “I made money” brag post. It’s a complete investment research logic for your judgment: should you hold or sell now?

1. What is Circle? In one sentence

Circle is the most compliant stablecoin infrastructure company globally, issuer of USDC.

USDC circulation is 75.3 billion, the second-largest stablecoin worldwide (after Tether’s 183 billion), up 72% YoY. Deployed on 30 blockchains.

But Circle is more than just “issuing coins.” Its product matrix includes: CCTP cross-chain transfer protocol (over 126 billion in total transaction volume), Circle Payments Network (annualized $3.4 billion B2B cross-border payments), Programmable Wallets (SOC 2 certified wallet-as-a-service), Arc blockchain (testnet with over 100 enterprise participants including Goldman Sachs, HSBC, BlackRock).

By June 2025, NYSE IPO under the ticker CRCL. On the first day, from 31 to 83 (+168%), then soared to 299 in 18 days, and fell to 50 over 8 months.

From 299 to 50, an 83% drop. I will break down every reason behind this rollercoaster below.

2. Why did I build my position at 53 in February?

My investment formula:

Excess Return = Good companies facing reversible crises × Extremely low share prices due to emotional misjudgment × Huge market growth potential × Square of patience

Where does 53 stand? It’s at the bottom of an 8-month decline after IPO. The drop from 299 to around 50 has priced in all known negatives: rate panic, Coinbase share split, lock-up sales, crypto market weakness.

Check each point:

Good company? Absolutely. The only stablecoin issuer holding both MiCA European compliance and OCC federal trust bank licenses worldwide. FY2025 revenue of 2.75 billion (+64%), adjusted EBITDA of 582 million (+104%), free cash flow of 530 million. USDC grew 72%, with no deterioration in fundamentals.

Reversible crisis? Yes. The drop from 299 to 50 has three reasons:
(1) Valuation bubble at 299
(2) Lock-up sales (General Catalyst sold off 1.51 billion, Fidelity reduced 982 million)
(3) Rate panic

Extremely low share price? 53 is far below the valuation center of 85-95, even below the most conservative DCF valuation of 62.

Huge market space? Stablecoins grew from 315 billion and still have multiple times growth potential in the future.

Further validation: After building at 53, the Q4 2025 financial report showed EPS of 0.43, far exceeding expectations of 0.16, and the stock price recovered to 126. On March 24, after plunging to 101, it continued down to 89, but I didn’t sell. On March 31, it rebounded to 95.41. From 53 to now, an 80% unrealized gain.

3. Three structural advantages of Circle

1. The deepest compliance moat among all stablecoins
Circle is the world’s first (and currently only) stablecoin issuer with MiCA compliance. Tether’s USDT has been delisted in Europe by Coinbase and Binance. USDC almost monopolizes the regulated European market.
The GENIUS Act (the first federal stablecoin bill in the US) was signed in July 2025. As an OCC-licensed entity, Circle fully qualifies as an “authorized payment stablecoin.”
President Heath Tarbert is the former 14th Chairman of CFTC and former Assistant Secretary of the US Treasury. Such high-level “revolving door” connections are impossible for Tether.

2. USDC’s on-chain usage rate actually exceeds USDT
Many only look at market cap—USDT $183 billion vs USDC $75.3 billion.
But on-chain transaction volume share: USDC 54.8% vs USDT 39.8% (Coin Metrics).
This means each dollar of USDC generates far more on-chain activity than USDT. USDC is the lifeblood of DeFi—ranking first in DEX liquidity pools at 34%, with 89% of stablecoin lending in Aave/Compound involving USDC.

3. BlackRock manages reserves, transparency beats Tether
USDC reserves are 100% held in Circle Reserve Fund managed by BlackRock—SEC-registered 2a-7 government money market fund.
33.6% US Treasuries, 50.8% overnight repo, 14.2% bank deposits. Disclosed monthly.

Tether? Quarterly “proof” from BDO Italy (not an audit), holding 84,000 BTC (~$7.8 billion) and large gold reserves—volatile assets. Although Tether announced plans for Big Four audits in March, completion remains uncertain.

4. Three structural weaknesses of Circle

1. 96% of revenue from interest—interest rate is critical
FY2025 total revenue of $2.75 billion, of which $2.64 billion is from USDC reserve investments. A 1% rate decrease impacts about $700 million annualized revenue.
The Fed plans to cut rates three times from September to December 2025 to 3.50-3.75%. Q4 reserve yield drops from 4.5% to 3.8%. If rates are aggressively cut below 2% in 2027, Circle’s profit model faces severe challenges.
But USDC growth can hedge this: a 100bp rate cut requires about $10k in new USDC (up 44%) to fill the gap. With current 72% growth, this target is fully achievable.

2. Coinbase share split—an ongoing profit erosion
This is the most uncomfortable point.
Coinbase earns 100% of reserve income from USDC holdings on its platform, sharing 50/50 of reserve income from other channels. In FY2025, Circle paid out $1.66 billion to partners—accounting for 60% of total revenue.
And this agreement renews automatically every 3 years, cannot be terminated without Coinbase’s consent.

USDC holdings on Coinbase increased from 5% in May 2022 to 22% in Q1 2025. The higher the share, the more is paid out, and the lower the profit margin.
That’s why Tether earned $13 billion in 2024 while Circle only earned $8k—despite being 50 times smaller in scale, profit difference is 50x.

3. BitGo StaaS—making every bank a potential competitor
BitGo isn’t a direct competitor to USDC but a more dangerous “weapon factory”—it enables SoFi Bank, WLF, even JPMorgan to issue their own stablecoins within weeks.
SoFiUSD is live (the first OCC bank-issued stablecoin on a public chain), with $4.7 billion issued. The GENIUS Act paves the way for banks to issue tokens.
If 5-10 large banks each issue a stablecoin, USDC’s network effect could be diluted.
But conversely, 100 fragmented bank stablecoins would need an aggregation layer. Circle’s CCTP and CPN might just serve that role.

5. Valuation: How cheap is $53? Should I sell at $90?
I used 10 methods for cross-validation:
Method. Valuation Center.
DCF (WACC 11%) $62
P/E benchmark $76
P/S benchmark $103
EV/EBITDA $88
EV/Revenue $90
P/FCF $92
Segment valuation $84
Comparable deals $47
Scenario analysis (probability-weighted) $105-115

Overall center: $85-95.
I bought at $53, below all method lower bounds. Even the most conservative DCF ($62) implies a 16% margin of safety.
Now at $95, it’s in the upper reasonable range. Not urgent to sell, but not a good time to chase the high.
20 analysts’ consensus target: $118-131. Bernstein $190, Canaccord $160, Citi $140+.
But the plunge from $126 to $101 on March 24 shows that the CLARITY Act is the real decisive variable.

6. The CLARITY Act—The key variable that decides everything
Latest timeline:
March 10: Senators discuss stablecoin revenue compromise at DC Blockchain Summit.
March 19: After a closed-door meeting, Lummis team says negotiations are 99% complete. Remaining issues are political, not technical.
March 20: Tillis and Alsobrooks announce a framework agreement—passive yield prohibited, active rewards allowed.
March 23: First draft text seen by the crypto industry—considered too strict. CRCL drops 20%.
March 31: Final text may be released this week.
Mid-April: Senate Banking Committee review (after Easter, April 13).
May: Must push for full chamber vote, or it could be delayed until after midterms.
Polymarket probability: 68% chance of becoming law by 2026.
If the final version is more lenient than the March 23 draft → CRCL could return to $126 (pre-drop level) or higher. If stricter → could test below $90 again.

That’s why I hold now but don’t chase the high. Waiting for the April text confirmation.

7. Holding logic: Path from $53 to $130
Current $95 → target $130 means 37% upside.
Path:
- CLARITY Act implementation in May (allow active rewards) → regulatory clarity → valuation multiple recovery
- USDC continues 40%+ CAGR (current 72% far exceeds target) → validate in Q1 2026 earnings report on June 3
- Interest rates stay above 3% (Fed keeps rates steady in March, expected to cut only 25bp in 2026) → rate panic eases
- Arc blockchain mainnet launches in late 2026 → revenue diversification story strengthens
- 10x probability (~10-15%) if USDC reaches $300 billion
- 3-5x probability (~30%) if USDC reaches $150 billion

8. Risk list (cannot ignore)
- Fed aggressively cuts rates below 2% → revenue could be halved
- Coinbase’s share split worsens profit margins
- Tether completes Big Four audit → Circle’s differentiated narrative weakens
- Strict version of the CLARITY Act passes → stablecoin ecosystem demand structure changes
- Large-scale bank issuance (enabled by BitGo StaaS) → market share eroded in 2027-28

9. One-sentence summary
Circle is the most compliant pure-play in the trillion-dollar stablecoin race—world’s only MiCA + OCC dual licenses, USDC on-chain usage surpasses USDT, reserves managed by BlackRock, with partnerships including Goldman Sachs, HSBC, Visa.
Buying at $53 was during the 8-month post-IPO bottom, amid all institutions fleeing, confirmed by 10 valuation methods as extremely undervalued. The CLARITY Act panic on March 24 dropped from $126 to $101 (-20%), but I held.
Now at $95.41, with an 80% unrealized gain, I am holding but prepared for a pullback if the CLARITY Act text turns out to be more restrictive than expected.
The April CLARITY Act text is the next key catalyst. If you want to enter, wait for that.
Good company, right price, let time give the answer.
$130 #Gate广场四月发帖挑战

Note: This article is for personal investment research sharing only and does not constitute any investment advice!