Debate between bulls and bears: Is CRCL, the leading stablecoin, worth buying? Why are high-growth financial reports failing to boost its stock price?

Original article by Odaily Planet Daily ( @OdailyChina )

Author/ Dingdang ( @XiaMiPP )

Recently, a heated debate has erupted in the X Chinese community regarding whether Circle (NYSE: CRCL) is worth buying, with public opinion clearly divided into two camps. One side views it as a valuable asset with significant institutional advantages in the stablecoin sector, while the other frequently questions the fragility of its profit model and potential cyclical risks. This clash of opinions reflects the drastically different judgment logics and levels of expectation currently held by the market towards innovative projects.

Based on extensive public discussions and rational analysis within the community, Odaily Planet Daily has compiled the core arguments and reasoning paths of both sides, attempting to present readers with a deeper structural divergence behind the controversy, beyond emotions and stances.

Background Brief

Since its listing on the NYSE on June 5, 2025, Circle (NYSE: CRCL) has experienced a typical "narrative-driven asset" price curve: from its offering price of $64, it rose to a short-term high of $298.9, then gradually fell back, and returned to near its offering price around November 20, 2025, hitting a low of $64.9, before recently rebounding to around $83.9.

On November 12, 2025, CRCL released its first full quarter (Q3) financial report since its IPO: total revenue of $740 million, a year-on-year increase of 66%; net profit of $214 million, EPS of $0.64, significantly exceeding market expectations. The most key driving factors were the surge in USDC circulation from $35.5 billion in the same period last year to $73.7 billion (+108%), and the increase in reserve asset yields in a high-interest-rate environment.

However, the stock price fell 11.4% on the first day after the earnings report was released, and dropped 20% cumulatively within a week. Key pain points include high distribution costs ($448 million, accounting for 60% of revenue), operating expenses eroding profits, an excessively high proportion of non-recurring income (71% from changes in the fair value of investments), and selling pressure from the lifting of share lock-up restrictions. According to SEC filings, the IPO lock-up period ends after the Q3 earnings report, with a large number of shares potentially becoming tradable starting November 14.

To address the differences in opinion surrounding these facts, Odaily has compiled the viewpoints of @0xNing0x , Jiang Zhuoer , @Phyrex_Ni , @BTCdayu , @qinbafrank, and others, making it easier for readers to compare and analyze.

1. Is the profit model sustainable? Is CRCL a bank or a financial infrastructure?

Jiang Zhuoer believes that CRCL's profit source is essentially "profiting from interest rate spreads": users exchange money for USDC, Circle allocates these funds to low-risk assets such as US Treasury bonds, earns interest income, and then deducts operating costs and channel revenue sharing.

The problem is that CRCL's profit distribution structure is extremely unfavorable to itself. According to the agreement, approximately 61% of the profits must be distributed to Coinbase, while Coinbase also holds a 22% stake in USDC, meaning 100% of that revenue goes to Coinbase. In other words, the actual percentage of profits that CRCL can retain is very low.

More importantly, the vulnerability of this "interest rate spread" model will be amplified during a rate-cutting cycle. When US Treasury yields fall to around 2% for an extended period, while operating costs approach 1%, CRCL may even enter a loss-making state after deducting channel revenue sharing.

He argues that CRCL's current profit structure does not stem from business efficiency, but rather from the regulatory arrangement that "prohibits issuers from directly paying government bond interest to users." This model is essentially a parasitic structure; once the policy is relaxed, or competitors indirectly circumvent the restrictions and share profits through rewards, rebates, staking, or other means, CRCL's profit margins will be completely eroded.

@0xNing0x provided a more detailed breakdown of CRCL's profit structure. CRCL's net profit is highly correlated with three core variables—USDC issuance size, the Federal Reserve's benchmark interest rate, and distribution channel costs.

Based on historical financial data, the elasticity coefficients of these three factors on profits are not the same: the elasticity of the scale factor is approximately 2.1, the interest rate factor is approximately 1.9, and the channel cost is approximately 1.3. This means that changes in the size of USDC have the greatest impact on profits. According to calculations, every $10 billion increase in the size of USDC can theoretically bring an additional $114 million in profits, corresponding to a profit elasticity amplification effect of approximately 21%.

Both of them believe that CRCL is like a bank disguised as a technology company, but the market values it based on the valuation logic of a technology stock or even a hybrid "technology + banking" model, which is a clear mismatch . The stock price will eventually return to reality.

In contrast, BTCdayu and qinbafrank offer their interpretations. They disagree with the analogy that "CRCL is a bank." They believe that simply understanding CRCL as a bank that profits from interest rate spreads is a very superficial observation.

In their view, CRCL operates on a classic "lose money first, then monopolize" model. Profit sharing is not forced, but a strategic choice. The essence is not short-term profit, but rather the irreversible accumulation of scale, network effects, and user mindshare.

They draw parallels with companies like Amazon, Pinduoduo, and JD.com: these companies all suffered losses for years and were even considered to have flawed business models, but they were later proven to have incurred losses as the cost of "buying market share," rather than structural defects. If you measure these companies by their current profits, you can only conclude that they "should have gone bankrupt long ago."

In their view, the stablecoin market is a highly likely "winner-takes-all" arena. Once USDC establishes an irreversible advantage in compliance and scale, today's seemingly heavy profit-sharing costs will transform into pricing power in the future. At that time, the situation of "begging others to use it" will change to "others begging to connect."

II. Will the interest rate cut cycle break through the profit model?

Jiang Zhuoer and some cautious individuals are very clear: interest rates are the lifeline of CRCL.

Because Circle's revenue is highly dependent on US Treasury yields, CRCL's revenue ceiling will be systematically compressed as long as interest rates trend downward. Even if USDC's size increases, they believe it will be difficult to completely offset the negative impact of the interest rate cycle.

They tend to view CRCL as a “financial spread benchmark” that is highly sensitive to macro interest rates, rather than a technology company with endogenous growth potential.

BTCdayu and qinbafrank argue that interest rates are not the key variable; scale is.

They believe the interest rate cuts will be gradual, not a one-off collapse. Meanwhile, the true boom for stablecoins has yet to arrive. Once the stablecoin law is implemented and more traditional financial institutions and corporate users begin to use stablecoins in compliance with regulations, the issuance size of USDC could rise from its current level of less than $100 billion to the $200-300 billion range, or even higher, within a few years.

They don't get bogged down in minute details like "whether next year's interest rate will be 3% or 2.5%." In their view, as long as the growth rate of issuance volume far exceeds the decline in interest rates, the overall revenue will still be expanding.

They tend to believe that the current market is overly focused on the explicit variable of "interest rates" while underestimating the more hidden but powerful force of "compliance driving scale migration".

More importantly, Coinbase's revenue sharing agreement is a "result of commercial negotiation" and is not immutable. As CRCL's market position shifts from "seeking distribution" to "being relied upon," its bargaining power will naturally tilt.

III. The Stablecoin War: Will CRCL be crushed by the giants?

Jiang Zhuoer's assessment of the competitive landscape is pessimistic.

He believes that once traditional financial giants like JPMorgan Chase fully enter the market, companies the size of CRCL will struggle to cope in terms of credit endorsement, distribution channels, and regulatory influence. More importantly, these giants are fully capable of seizing market share through subsidies, concessions, and even outright losses.

In his view, CRCL does not possess the same censorship resistance as USDT, nor is it irreplaceable. Once traditional institutions begin to roll out stablecoins, CRCL may become marginalized.

@BTCdayu emphasized that the competition among stablecoins is essentially a battle for user mindshare. USDC has built an invisible moat through compliance, licenses, partnerships, and long-term accumulation. In the future, most funds are likely to flow to the safest and most recognized USDC. CRCL's strategic alliances with Coinbase, BlackRock, JPMorgan, and others, as well as its upcoming acquisition of the first stablecoin bank license in the United States, further solidify its market position.

BTCdayu and qinbafrank emphasized that this was a misjudgment of the competitive logic of stablecoins.

They believe that stablecoins are not simply financial products, but rather typical "network products." Their true competitive advantage lies not in capital strength, but in user mindshare, security consensus, and migration costs.

They pointed out that JPMorgan Chase is now developing stablecoin-like products, but these are more like "deposit tokens" circulating within institutions, belonging to a closed system, more like an enterprise version of QQ coins than the open network USDC.

In their view, large banks' stablecoins serve their own business systems more than building a globally open clearing network. The real competition with USDC lies in equally open, compliant, and composable stablecoin systems, not the banks' own closed assets.

IV. Is compliance a moat or a hidden risk?

Jiang Zhuoer believes that CRCL's profit model is built on the institutional advantages brought about by the regulatory vacuum. Once the rules change, the advantage may become a shackle.

BTCdayu and qinbafrank have completely opposite opinions.

They believe that stablecoins will eventually be "co-opted" by the government. Whoever can achieve compliance first will become part of the national infrastructure.

In their logic, compliance is a clearing mechanism, not a constraint. As the gray areas are gradually squeezed out, it actually benefits players like USDC, which have already established a deep compliance strategy.

V. Short-term trading perspective: Unrestricted shares, selling pressure, and trading rhythm

Phyrex_Ni's perspective is more focused on the trading aspect.

His core focus is not on long-term logic, but rather on short-term supply and demand structures. He particularly noted that CRCL has entered a large-scale unlocking window, with the lock-up periods for executives, founders, employees, and early investors gradually ending.

He doesn't believe these shares will necessarily be sold off in a concentrated manner, but he thinks this is a typical phase of "sudden increase in supply," which puts additional downward pressure on the stock price.

His stance is very clear: the current price is not expensive, but he is unwilling to bear the "time cost + opportunity cost" and would rather wait until the uncertainty dissipates before making a judgment .

VI. Practical Barriers to Payment: Structural Limitations of USDC in the United States

Phyrex_Ni raised a rarely discussed but crucial question: tax attributes.

He pointed out that under the US tax system, USDC is not considered "cash" but rather an "asset." This means that every payment made with USDC may trigger a capital gains tax calculation obligation.

This makes it inherently difficult for USDC to enter the US retail payment market. Even if the regulatory path is smooth, large-scale consumer payments will be virtually impossible as long as tax laws remain unchanged.

In his view, this will limit USDC's payment ceiling in the United States, making it more likely to remain in B2B, cross-border clearing, and financial back-end, rather than becoming a true "digital cash".

VII. Long-term prospects: Is it a cyclical target or a structural opportunity?

qinbafrank is a typical long-term bullish investor.

His logic is not complicated: stablecoins are a huge market, and they are far from reaching their ceiling. The idea of it growing from hundreds of billions of dollars now to trillions of dollars in the future is not a pipe dream.

He believes that in a market with ten times the potential, leading and near-leading companies naturally enjoy a premium. While CRCL may not be the absolute number one, it is the most compliant and the easiest to be accepted by institutional systems.

From his perspective, what the market should really be doing is not getting caught up in short-term fluctuations, but rather identifying which companies in this structurally driven sector are qualified to participate in the "last round of concentration dividends".

Summarize

The cheaper the price, the more carefully it should be studied, rather than easily dismissed. Currently, short sellers are seeing short-term structural risks: excessively high distribution costs, path dependence on interest rates, supply pressure from the lifting of restrictions, and the potential impact of marginal changes in taxation and regulation; long sellers are betting on structural dividends over a longer time horizon: the migration of global settlement demand, the institutionalization of compliant stablecoins, and the "quasi-infrastructure attributes" of network-based products once they are established.

Undeniably, Circle may find it difficult to defeat Tether for a long time to come, but similarly, it will be extremely difficult for new competitors to replicate Circle's established compliance path, channel network, and institutional trust in a short period of time.