Stablecoins have officially made the leap from crypto niche to mainstream economic engine. The recently passed stablecoin bill didn’t just offer regulatory clarity — it created a perfect Trojan horse for TradFi to enter crypto. Banks, fintechs, even social media platforms now have a framework to tap into blockchain rails while reducing cost bases and unlocking new layers of shareholder value.
But there’s a macro layer here that’s even more powerful.
Stablecoin reserves are mostly parked in government securities — U.S. T-bills, to be exact. These yield-bearing instruments generate income that is entirely retained by Circle: no leverage, no duration mismatch, no capital costs. A money machine.
The macro economic flywheel is clear: more stablecoin supply → more demand for bonds → lower yields → lower interest expense for the government → lower cost of capital for corporates.
Incentives are beautifully aligned.
Circle: the market’s early favorite
Circle’s USDC represents c.25% of overall stablecoin market cap
Circle, issuer of USDC (~25% market share of a $250B market), IPO’d at $31 and now trades ~7x that level just some weeks later. But with a trailing EV/EBITDA multiple around 170x, the valuation has sparked serious debate, and it is far above the multiples for many other high growth industries.
Typical P/EBITDA multiples for high growth industries
Is Circle dramatically overvalued? Or did the IPO simply get underwritten too cheaply for the benefit of insiders?
Making sense of the valuation
To justify these spot multiples, you need to underwrite two key assumptions:
Growth of the overall stablecoin market, andCircle’s ability to maintain or grow market share
Consensus estimates point to a c.55–60% CAGR base case market size growth over the next 5 years.
When taking Circle’s reported financials during its IPO, and assuming that:
its cost structure remains stable over the next 3–5 years (no change in distribution cost or margins),its market share remains stable at c.25%,the overall market grows in line with the consensus estimates of c.55–60%
Some back on the envelope calculations lead to the following projections for its key financials. We will be able to finetune these estimates as Circle reports its financials (Q2 earnings coming up soon), but currently a fivefold increase in operating profit per share seems reasonable given these assumptions, leading to an 2028F P/EBITDA multiple of c.40x, which seems a lot more reasonable.
Simple financials forecast for Circle and P/EBITDA calculations
Scenario analysis
Clearly the major variables driving upside and downside risks are market size growth and market share, which is why a sensitivity for these variables make sense.
Scenario analysis for different stages of market growth and market share
Bull case
Example of an optimistic scenario: stablecoin supply beats consensus expectations and reaches a CAGR of 90%, all whilst Circle is able to grow its market share from 25% to 35%. In this very optimistic scenario, a case can be made that Circle is currently undervalued at P/EBITDA 2028F of 15x.
Bear case
In a pessimistic scenario, new players could enter the stablecoin supply market (e.g. JPM and X issue their own stablecoins and take market share from Circle) leading to Circle losing marketshare from 25% to 15%, all whilst the overall market size grows less than expected at 30% CAGR. In this scenario Circle can currently be considered very overvalued at c.135x P/EBITDA 2028F.
Catalysts to watch
Circle’s Q2 2025 earnings + updated guidanceUpdates on stablecoin market growthEntry of new distribution partners that could improve margins (Coinbase competition)Competitive pressure from JPMorgan, PayPal, X, Meta, etc.
Conclusion
Circle’s valuation only makes sense if you buy into the stablecoin supercycle.
If you do, the current multiples may eventually look cheap.
If you don’t, they already look absurd.
Either way, Circle is now the purest equity proxy for the growth of the on-chain dollar.
The stablecoin supercycle: making sense of Circle’s valuation was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.