I nearly choked on my coffee when the PDF landed in my inbox: Circle’s implied market cap had vaulted past the entire supply of USDC in circulation. The figure splashed across the page—roughly $9.2 billion, according to the latest secondary-market prints—wasn’t shocking on its own. What sent my eyebrows rioting was the context: USDC’s live float sits closer to $7.9 billion, and Circle’s own Series E round only tagged the company at $4.5 billion a year ago. In the middle of a crypto market that’s still nursing bear-market bruises, we’re suddenly talking about an 800% rally in the company’s shadow stock price. Something didn’t add up, so I started digging.
Here’s What Actually Happened
Late last Friday—just as the U.S. was clocking out for the long Memorial Day weekend—Circle quietly updated the cap table it circulates to secondary-market brokers. No press blast, no Jeremy Allaire victory lap on X, just a line-item tweak on a password-gated portal. The new number: 1.3 billion fully diluted shares at $7.07 apiece. Multiply those two, you get the nine-and-change billion valuation that’s now rocketing around Telegram rooms.
Meanwhile, CoinGecko has USDC’s circulating supply at 7,971,577,048 tokens as of May 29, 14:00 UTC. That means the firm is—on paper—worth roughly $1.3 billion more than the dollars it promises to keep in the bank. The crypto-Twittersphere instantly labeled it the dawn of “Stablecoin Summer,” a callback to 2020’s DeFi Summer and a not-so-subtle jab at Tether’s perennial dominance.
Why I’m Not Ready to Break Out the Margaritas
Don’t get me wrong: I’m as bullish on mainstream stablecoin adoption as the next degen with an Alameda PTSD twitch. But Circle’s sudden valuation hop feels disconnected from the on-chain reality I’m watching every day in Dune dashboards.
- On-chain velocity is down. USDC transfer count averaged 324k per day in May, versus 1.1 million at the 2021 peak.
- Exchange balances keep draining. Coinbase, Binance, and Kraken collectively hold 27% less USDC than they did six months ago, according to Glassnode.
- Redemptions still outpace mints. Circle’s own transparency page shows $11.4 billion redeemed year-to-date versus $10.7 billion issued.
Those are hardly the victory-lap metrics you’d expect from a firm whose stock is mooning eight-fold.
Follow the Money—Or at Least Try To
So who’s buying these shares? Two brokers I spoke with—both requested anonymity because secondary-market trading lives in a legal gray zone uglier than Gary Gensler’s Twitter mentions—said the new bid stack is “mostly family offices.” The key driver: a fresh wave of FOMO that stablecoins could be the rails for tokenized Treasuries, RWAs, and whatever flavor-of-the-month TradFi integration comes next.
One broker forwarded me an email pitch that literally read,
“BlackRock’s BUIDL uses USDC; do you really want to miss the next AWS of digital dollars?”I rolled my eyes, but let’s be real—the narrative sells. BlackRock’s tokenized fund does pay its yield in USDC, and Larry Fink’s endorsement still carries weight from Greenwich to Singapore.
Wait, Isn’t Circle Still Trying to Go Public?
Yup. Circle’s original SPAC marriage with Concord Acquisition Corp. fell apart in late 2022, right after the FTX implosion torpedoed public-market appetite for anything remotely associated with SBF. Insiders whispered that the SEC kept moving the regulatory goalposts; Circle’s lawyers politely called it “extended review.”
Fast-forward to last month: Jeremy Allaire told Fortune that Circle still intends to IPO “when the time is right.” Translation: when the SEC stops suing every exchange like it ran over their dog. But the sudden 800% mark-up in the secondary market complicates that roadmap. If the implied price keeps ballooning, Circle could walk into the S-1 filing with a valuation the public market simply won’t pay—think WeWork 2019, but with stablecoins instead of communal kombucha.
Comparing Apples, Oranges, and Tethers
For perspective, let’s stack Circle against its boogeyman rival. Tether’s last attestation pegged its surplus reserves at $6.2 billion on assets of $97 billion. If we slap a conservative 1× multiple on surplus capital (arguably the closest proxy to equity value), we get a ~$6 billion “Tether Inc.”. Circle’s new $9 billion tag is 50% richer even though USDC’s supply is barely 8% of USDT’s 110-billion unit behemoth.
I’m not saying Tether’s number is gospel—Paolo Ardoino still refuses a Big Four audit like it’s a vampire shunning daylight. But the comparison underscores how frothy Circle’s price looks when you zoom out.
Desk Talk: What Market Makers Are Whispering
Jump Crypto’s head trader dropped a spicy take in our Signal chat:
“Circle’s pricing in a Fed rate cut cycle where yield on reserves vanishes. They have to lean on tech multiple instead of net-interest multiple going forward.”Translation for normies: Circle currently earns 4.8% on reserve Treasuries, a juicy carry that gets haircut if Jerome Powell pivots dovish. Equity analysts start modeling Circle as a fintech growth story rather than a high-yield money-market fund, so they slap bigger revenue-multiples to the future ‘payments rails’ narrative.
Problem is, we’ve been here before. Remember Silvergate’s SEN hype in 2021? It traded at 8× book until it didn’t—and we all know how that ended (hint: FDIC receivership).
My Tangential Rabbit Hole: The PayPal PYUSD Curve
Earlier this month I stumbled on a datapoint I can’t unsee: PayPal’s PYUSD supply quietly tripled to 400 million since March, and 81% of that sits on Kraken. Why does this matter? Because PYUSD redemptions and issuances flow through Paxos, whose trust charter is effectively a template for what Circle wants. If PYUSD starts eating into USDC’s merchant-payment use case, Circle’s top-line story gets thinner faster than a Beijing air filter.
Yet investors piling into Circle equity seem blissfully unaware. Or maybe they’ve priced in a PayPal acquisition someday—wild, but stranger things have happened (Square + Afterpay, anyone?).
What This Could Mean for Your Bags
Stablecoin valuations may feel like inside-baseball, but they trickle down to token portfolios in sneaky ways. For starters, USDC pools on Uniswap, Curve, and Pendle bake in smart-contract risk premia. If the market suddenly treats Circle like a wobbly unicorn, LPs could demand higher yield, pushing up swap slippage and affecting everything from ETH liquid staking loops to RWA vaults.
Second, keep an eye on MakerDAO. Roughly 16% of DAI’s backing is USDC via the PSM. If the DAO senses Circle’s equity markets running hotter than fundamentals, they might accelerate the migration to tokenized treasuries or even crank up sDAI adoption to dilute USDC reliance. That could ripple into CDP fees and, yes, your Maker farm APRs.
Community Pulse Check
I jumped into a random Bankless Discord stage last night, and the vibe ranged from “Circle to the moon, bro” to outright disbelief. One OG joked that Circle’s new valuation was “just VC exit liquidity before the T-bill gravy dries up.” Another argued that a regulated, transparent operator deserves the premium.
Me? I’m stuck in the middle. I admire Circle’s monthly audits, love the low-friction swaps on Base, and applaud their policy team for actually engaging with D.C. But I can’t shake the nagging math that $9 billion for a shrinking float is, at best, pricing in perfect execution. Crypto history tells us perfection is rarer than an XRP maxie capitulating on Twitter.
Final Thought: The Hidden Clock
Every valuation contains a clock ticking toward a moment of truth. For Circle, that moment will likely be the next big redemption wave. Could be triggered by a black-swan hack, a regulatory curveball, or something as mundane as rates grinding down to 2%. When that clock strikes, we’ll see whether today’s 800% moon-luster holds or peels off like cheap chrome.
I’ll keep my alerts on. Until then, enjoy Stablecoin Summer responsibly—and remember that every beach party needs a lifeguard.
