Circle, as the issuer of the USDC stablecoin, occupies an important position in the Crypto Assets market. Currently, USDC is the second largest stablecoin in the world, second only to USDT, accounting for 24% of the approximately $250 billion stablecoin market, with a scale of about $60 billion.

From a financial performance perspective, Circle achieved $1.6 billion in revenue last year, but it needs to share $900 million with Coinbase, resulting in an after-tax net profit of about $120 million. The current market valuation of Circle is $44.4 billion, which seems high from a traditional valuation standpoint, but it makes sense if viewed as a growth-oriented company.

Looking ahead, according to predictions from Wall Street analysts, the stablecoin market could expand to a scale of $2 trillion by 2028. If USDC can maintain its current market share, Circle's business scale is expected to reach $480 billion, which is equivalent to 8 times the current size. At that time, its annual profit may rise to $12.8 billion, with a price-to-earnings ratio of only 3.64 based on current valuations, indicating a clear undervaluation. Under these circumstances, a valuation of Circle reaching several hundred billion dollars is not impossible, and there is potential for 10 to 20 times growth within the next three years.

Of course, investing in Circle also carries risk factors. First, currently 54% of the profits need to be shared with Coinbase, and there is uncertainty regarding future changes to this profit-sharing ratio. Second, the entire analysis is based on the assumption that the stablecoin market can achieve the expected growth, which also needs to be carefully evaluated.

As an investment strategy, it is worth considering an appropriate allocation to Circle, viewing it as a bet on the future development of Crypto Assets infrastructure, similar to the logic of early investments in Bitcoin. If the stablecoin market develops as expected, this investment could yield significant returns; even if the market does not develop as anticipated, under reasonable risk control, the losses would still be acceptable.