this is not just a capital - raising exercise, but rather a demonstration of the previously unmet market demand for stablecoins in the public market.

Introduction

Circle's milestone - making public listing highlights the growing institutional demand for regulated crypto infrastructure. However, the sustainability of its valuation relies on the expansion of its core revenue engine, which is closely linked to the total supply of USDC.

This article aims to shift from narrative to data - driven analysis. Circle derives over 95% of its revenue from channels related to USDC, making it highly sensitive to short - term interest rates and the total circulation of USDC. We first structurally deconstruct the supply curve of USDC, analyzing changes in chain - level concentration, relative capital liquidity, and inflection points under specific market conditions to identify the variables that best drive minting activities.

Then, we introduce a recalibrated autoregressive model that can forecast weekly supply volumes with an error range of approximately ±1.5%, and directly translate incremental expansions into EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) sensitivity.

Finally, as a conclusion, we demonstrate how to use this supply metric as a real - time tradable signal, providing market participants with a real - time proxy for Circle's fundamental dynamics.

Circle Valuation Structure Analysis

On the basis of a $58.2 billion market cap, Circle's price - to - earnings (P/E) multiple has exceeded Visa's nearly eightfold (Visa's P/E is around 15). The firm investments from well - known institutions such as ARK Invest and BlackRock indicate that investors are not only pricing in current fundamentals but also betting on its potential for large - scale adoption in the future.

Circle's valuation metrics stock code screen - data source: Yahoo Finance

To sustain its current valuation, Circle must continue to demonstrate a strong trajectory of profit growth. Historically, over 95% of Circle's revenue has come from interest and dividends generated by the fiat asset reserves of its stablecoin (such as bank cash, short - term US Treasury bills, and the Circle Reserve Fund managed by BlackRock). Therefore, its revenue is highly sensitive to short - term interest rates and the circulation volume of USDC.

Data source: SEC

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) Sensitivity Breakdown

Where:

Net Interest Margin (NIM): Interest income obtained from income - generating assets (such as US Treasury bills).

Supply - flow - based fees: Fees generated from the minting and redemption of USDC.

As the Federal Reserve's rate cuts loom, the Net Interest Margin (NIM) will be compressed. The market is pricing in a shift where revenue growth based on transaction volume will outpace the impact of interest rate compression.

This growth relies on the continued adoption of USDC as a global payment network, with its fee - capturing ability expanding with the pace of usage, cross - border fund flows, and ecosystem integration. Therefore, it is crucial to study the supply dynamics of USDC. This is not only a leading indicator of Circle's future revenue stream but also the core anchor of its valuation, providing real - time insights into the development of its business model.

Stablecoin Supply Dynamics Analysis

Currently, the total supply of stablecoins has climbed to a record - high $251 billion, a 34% increase from the peak of $187 billion in the last cycle in 2021. This growth reflects significant capital inflows and a resurgence of confidence in the crypto ecosystem.

Stablecoin Historical Total Supply - data source: DefiLlama

At present, USDT and USDC account for over 86% of the total stablecoin supply. Among them, USDT leads with a 62.1% market share, followed by USDC with 24.2%. These two stablecoins play foundational roles in different ecosystems, especially USDC, whose development trajectory provides a more transparent perspective on regulated, institutional - level demand.

To understand how supply performs in market cycles, we start with a simple supply - flow formula:

Where:

ΔSt: The net change in the total stablecoin supply

Mt: Minting volume (fiat → stablecoin)

Rt: Redemption volume (stablecoin → fiat)

This dynamic reveals the core logic of stablecoin supply:

Expansion: When minting volume exceeds redemption volume, the supply increases.

Contraction: When redemption volume exceeds minting volume, the supply decreases.

Looking at the history of USDC through the lens of expansion and contraction, we can see that its supply changes are closely related to key inflection points on the overall timeline of the crypto industry.

USDC Circulating Supply - data source: Glassnode

Accelerated Expansion (2025 and beyond)

With Circle's listing, the current circulating supply of USDC has reached a record - high $61.2 billion. This scale reflects the journey of USDC evolving from a simple transactional stablecoin to a recognized core financial primitive. Since 2021:

Daily average trading volume has grown by 406%, soaring from $777 million to $3.152 billion.

Daily active users have grown rapidly at a compound annual growth rate (CAGR) of 142.92% since 2020, reflecting its rapid adoption across various ecosystems.

Circle USDC Metrics - data source: Artemisxyz

The growth of USDC is driven by three main forces:

The revival of DeFi: A resurgence in interest and participation from crypto - native user groups.

Adoption by traditional finance (TradFi): Gradual acceptance by a wider audience in traditional finance for settlement, cash management, and fund allocation.

Strategic partnership with Coinbase: Through its partnership with Coinbase, one of the world's largest crypto user bases, USDC has gained unparalleled distribution advantages in retail, institutional, and on - chain ecosystems.

Capital Efficiency Reveals True Value

Looking at supply volume alone is not sufficient to reflect the actual utility of stablecoins. More importantly, the real value of stablecoins lies in the efficiency of their capital movement.

Stablecoin trading volume comparison - data source: Artemisxyz

On the Binance platform, USDT dominates with a supply of $18.9 billion, while USDC has a supply of only $5.81 billion, about one - third that of USDT.

However, in terms of trading volume, the gap almost disappears. In the past 30 days, USDT's trading volume was $44.8 billion, while USDC reached $38.7 billion, only 13.6% behind.

By calculating the velocity of money (i.e., 30 - day trading volume divided by circulating supply), we can quantify capital efficiency:

Applied to USDT and USDC:

Data source: DefiLlama, Visaonchain

The results show that USDC's velocity of money is 2.81 times that of USDT, meaning that each dollar of USDC is traded almost three times as frequently as USDT. This indicates that USDC has faster - moving capital and higher utility, revealing a deeper layer of on - chain value.