Author: Ruby; Source: X, @Rubywang

Circle fell from $130 to $90, falling 30% before rebounding. Should I open a position? My verdict: No rush. For $90 Circle, you are paying the price of a “fintech platform” for an “interest rate bank”.

I read the 10-K annual report, ran the Q1 on-chain data, checked Polymarket interest rate expectations, read the latest draft of the CLARITY Act, and pulled up all insider stock selling records to share my judgment.

This article is only to update and record my judgment on $CRCL and does not constitute investment advice.

Conclusion first

More than $90 is not a good price to open a position. My judgment is to hold it.

Want to increase your position? A better entry range is $80 or less.

Why? 96% of revenue relies on the interest rate banking model, but the market is pricing in fintech (financial technology) platforms - the forward price-to-earnings ratio is more than 40 times, which is already in the high range.

There are three catalysts that will determine the direction in the next half year: CLARITY Act Senate committee vote (key window in late April), Q1 financial report (expected from mid-May to early June), Coinbase agreement renewal + Q2 financial report (August). In addition, if BTC falls below $60K, the associated decline in crypto-related stocks is also a potential downside catalyst. Any negative result may send the stock price to the target range.

I am still optimistic about the long-term direction of stablecoin payment, but the current price does not give enough safety margin to increase the position.

1. Valuation: With a stock price of $90, what are you buying?

You are paying the price of a "financial technology platform" for an "interest rate bank" that has not completed its transformation.

1.1 Circle’s P/S needs to be corrected to P/RLDC

A stock price of $90 corresponds to a valuation of 22 billion. Based on FY25 total revenue of $2.75 billion. It looks like the P/S is 8, which many would say is undervalued.

But don’t forget, $1.66 billion is distribution costs—mainly money paid to Coinbase. The revenue (RLDC, Revenue Less Distribution Costs) that actually stays in Circle’s pocket after all payments are made is only $1.08 billion.

So Circle’s valuation cannot be viewed using surface P/S, but P/RLDC—that is, 20x. Higher than the current P/S of Visa and Mastercard (about 11-12x), and close to the upper limit of Adyen's historical valuation (~20x). The net profit margins of these payment networks are in the 45-65% range.

96% of Circle's current business model is the bank spread model, and only 4% of other revenue is close to the financial technology platform. The market has given dual pricing of "bank valuation + platform dream". We split $90 into two tiers:

The reason why the range of platform options is very wide is because the income of CPN, Arc, and AI Agent has not yet been verified - uncertainty itself is part of the pricing.

1.2 The Prospects of Stablecoins in 2028

Then you might say, what we need to look at is the future. Yes, I am absolutely optimistic about the long-term space of stablecoin payment and market value, and it is one of the few applications in the currency circle that continues to grow without being affected by cycles. So let’s calculate this space together and see which side will you stand on?

The following is the fiscal year 2026 guidance provided by management:

Management Guidance for CRCL FY25 Q4 Financial Report

It is estimated that this year's financial guidance will be fully met. Assumptions: The total scale of stablecoin issuance grows at an annual growth rate of 40%. This year’s USDC circulation is 90-100B, the average interest rate is 3.3%, other income reaches the management guidance of 150-170 million, and the RLDC margin is 40%.

Under these assumptions, $90 trades at a forward P/E of over 40x. Compared with peer fintech companies, it is already in the high range.

Of course, if you are willing to pay for the narrative of Agentic payment, Arc public chain, and CPN network, you can believe that Circle is worth $110-120+. From current revenue analysis alone, the market has priced in Circle’s platform narrative.

Remarks: Personal estimated analysis, for reference only

2. Focus on Circle’s financial report in 2026

The advantage of currency stocks is that on-chain data can be observed before financial reports. How have stablecoins and USDC performed over the past quarter?

2.1 Observation on the scale of stablecoins in Q1 of 2026

The good news is that from Q4 of 2025 to Q1 of 26, despite the crypto bear market, the issuance scale of stablecoins is still growing.

But quarterly growth slowed, the slowest quarter since Q4 2023. In other words, the logic of relying on USDC volume growth to drive revenue is a bit out of reach in the short term.

The chart below shows the quarterly growth rate of stablecoin supply from 2024 to 2026. Pay attention to the rightmost column.

The key point is: emerging stablecoins (USD1, USDS, etc.) have collectively accounted for about 15% of the market share, and the duopoly’s total plate is being eroded. Circle hasn’t lost its share, but it hasn’t gained any growth either.

2025 Q4 vs 2026 Q1 Stablecoin issuer share (data summarized in many places, there are slight errors in different calibers)

2.2 Q1 financial report forecast, will there be any big surprises?

Highly likely to be in line with expectations, no big surprises There is no interest rate cut in Q1, and the reserve income plus other income of 30-40 million can meet the standard. If there is a turning point, we still need to see whether other income lines have exceeded expected growth.

To meet management’s full-year CAGR guidance target of 40%, the real growth pressure for USDC is in Q2-Q4, and the issuance needs to reach approximately 105 billion by the end of the year.

2.3 Policy: CLARITY Act and the absence of promoters

The biggest focus recently is the yield ban clause in the CLARITY Act.

Circle itself does not pay yield, and the business model is not directly affected. But the indirect impact is real - the transmission chain is like this:

Yield ban takes effect → Coinbase cannot provide USDC passive income (activity-based rewards are still allowed) → Reasons for retail investors to hold USDC weaken → Circulation growth slows → Circle core revenue engine slows down.

Another easily overlooked risk: The most critical crypto legislative pusher in the White House is no longer there. David Sacks resigned on March 26 due to the expiration of his 130-day special government employee term and became PCAST ​​co-chairman. There is no successor. This means that if the bill is not passed before May, digital asset legislation will be difficult to advance in the foreseeable future - the most critical legislative window period, and the strongest internal pusher has been lost.

The following I have compiled the events and time points that I will focus on this year:

3. Who is trading CRCL? Is it a retail stock?

$CRCL is almost the most mentioned currency and stock target on social networks. It is highly elastic and volatile, and has a bit of a meme stock temperament.

3.1 Why $CRCL is so divergent

I specifically checked the latest data and found that Circle’s shareholding structure is roughly as follows:

Data source: Tipranks

It was listed only 25 years ago, and the institutional shareholding ratio is less than 40%. The allocation ratio is not as high as that of mature technology stocks. It can be said that it is dominated by retail investors and insiders.

Retail stocks have high beta and are more narrative-driven. Fluctuations are the norm, as are overestimations and underestimations. Therefore, the valuation given by institutions ranges from $60 to $280, with a gap of 4-5 times.

From the perspective of shareholding structure and proportion of retail investors, similar U.S. stock cases include Coinbase in its early days of listing, and current Palantir and Robinhood—all retail-dominated, narrative-driven, and highly volatile targets.

The good news is: as the proportion of institutions increases, there is room for "institutional premiums" in the long term.

3.2 Executives continue to sell, and the price is worthy of reference

After the last earnings report was released, I tracked all SEC filings and ran all transaction filings for insiders selling stocks.

From February 26 to April 2,insiders made a total of approximately 23 public market sales, accumulating approximately 649,000 shares, for approximately $62.2 million.

Buy in the same period: 0.

Of course, selling during the unlocking period after the IPO is normal. But the 23:0 ratio, and the selling price range ($82 to $123), are still worth considering.

Sell Strength Ranking:

• Heath Tarbert (President)The most aggressive — 4 sales totaling ~191,000 shares, cashing out ~$19.35 million, cumulative reduction of approximately 26%

• M. Michele Burns (Director) — 4 transactions totaling ~162,000 shares, cashing out ~$15.93 million, cumulative reduction of approximately 27%

• Patrick Sean Neville (Director) — Sold 50% of Class A holdings on April 1, leaving only 30,000 Class A shares, but still holds about 2.36 million Class B shares and a large number of options. However, Jeremy Allaire (CEO) overall reduction ratio is very small. On February 26, 15,625 shares (approximately $1.4 million) were sold, but the overall reduction was very small. He currently holds a combined direct + trust holding of approximately 560,000 Class A shares and 16.2 million Class B shares, accounting for approximately 6.8% of the economy. With Class B's 5 votes per share (total voting rights capped at 30%, shared with co-founder Neville), Allaire actually controls about 26% of the total voting rights. Data source: SEC, Markets Daily, Ticker report

4. Circle’s real competition comes from new narratives

Stablecoin issuance is already a red ocean, and stablecoin payment is a blue ocean.

The pattern of compliant stablecoin issuance is basically stable, and profits can be calculated. Circle’s story is no longer about circulation—it’s about other income, the CPN payment network, wallet, and Arc public chain.

So in my opinion, Tether is no longer the real target of Circle’s management. Even if Tether enters the United States through compliance, the circulation of USDC in the existing compliance platform will not change for a while - Circle's announcement of deepening cooperation with Polymarket in the past two days is an example. Tether’s strategic focus this year is also turning to diversified investments and the gold token XAUT.

The real competition Circle has to face comes from Stripe.

The strategic direction of CPN payment network + wallet + Arc public chain highly overlaps with Stripe, which is valued at 160 billion. Stripe has fully implemented its AI + stablecoin strategy after 25 years of implementation - the acquisition of Bridge and Privy, the launch of the Tempo mainnet, and the implementation of the MPP protocol. Both are working hard on agentic payments and have joined the x402 protocol led by Coinbase.

If Stripe goes public, the scarcity of Circle's "first stablecoin stock" may be discounted.

Tempo has been launched, and now the pressure is on Circle. When will the mainnet of the Arc public chain be released? In addition, management has mentioned in the financial report meeting that it is exploring token issuance. The progress of the implementation of Arc and AI payment is the key to judging whether Circle can form a second curve of revenue.

5. Summary

The stablecoin market is still growing during the crypto bear market, but the rate of growth has slowed.

The duopoly structure is stable, but long-tail competitors are encroaching on share.

Distribution is the red ocean, and payment is the blue ocean - and on the payment line, neither CPN nor Arc have experienced explosive growth.

$CRCL is still a scarce U.S. stock target in the stablecoin circuit, and the high proportion of retail investors partly explains why the market has attracted so much attention. Agent payment is a battleground for future growth. There is room for imagination, but the scenario of large payment volume has not yet been implemented.

$80-100 is a reasonable but optimistic valuation range. $90 I continue to hold, neither buying nor selling, waiting for catalysts. Finally, I have compiled the indicators and impact events that are of concern to $CRCL this year for your reference.

The above analysis is based on public information and personal judgment and does not constitute investment advice. The analysis framework uses my self-built Tech Earnings Deep Dive Skill.