As Circle files for its IPO, what implications will this have for the broader stablecoin market? Can it challenge Tether’s $160B dominance?
Circle comes full circle with its IPO bid
Circle, the company behind the USD Coin (USDC) stablecoin, has officially filed to go public. On Apr. 1, it submitted its registration documents to the U.S. Securities and Exchange Commission, marking a notable step for the entire stablecoin industry.
The company intends to list on the New York Stock Exchange under the ticker symbol “CRCL.” However, key details such as the number of shares and the expected pricing range have not yet been disclosed. More recent estimates place the company’s valuation closer to the $4 to $5 billion range.
Financially, Circle had a strong revenue year in 2024. The company reported $1.68 billion in revenue and reserve income, up from $1.45 billion in 2023 and more than twice the $772 million it posted in 2022.
But its profit metrics tell a more nuanced story. Net income dropped to $155.7 million in 2024, down from $267.5 million the year before. More notably, its EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, declined by 29% to $284.8 million.
Circle’s IPO filing raises alarms due to hefty operational costs, with over $250 million spent on compensation and $140 million on other expenses.
Omar, an investor at Dragonfly, a crypto venture fund, points to weakening gross margins, deregulation risks in the U.S., and a core income driver (rates) already peaking. With growth stalled and multiple headwinds, Omar suggests that Circle’s 32x 2024 earnings valuation is overly expensive.
This IPO arrives during a period when U.S. regulatory attitudes toward crypto appear to be shifting, especially under the Trump administration.
Back in January, one well-known crypto analyst suggested that the IPO could become one of the most important events of this cycle, opening the door to stronger institutional involvement in blockchain-based financial infrastructure.
From a market share perspective, USDC remains the second-largest stablecoin by market cap, trailing only Tether’s USDT. As of Apr. 4, USDT controls more than 61% of the stablecoin market, while USDC holds roughly 25%.
Competition is also intensifying. New entrants such as PayPal USD (PYUSD) and Ripple USD (RLUSD) are slowly expanding their presence, especially in the U.S. and enterprise sectors, which have historically been strongholds for Circle.
So what does this all mean for the stablecoin market? Let’s dig deeper into how Circle’s IPO could reshape the competitive dynamics of the sector — and whether this might finally present a credible challenge to Tether’s (USDT) top spot.
Circle’s IPO and the new era of stablecoins
Circle’s decision to go public has sparked widespread discussion about transparency, regulatory alignment, and shifting expectations around stablecoin governance and structure.
Crypto.news reached out to various experts to explore how this move might impact institutional adoption and stablecoin market dynamics moving forward.
David Robnett, Co-Founder and Managing Director of Asset Token Ventures, views the IPO as a key turning point in the stablecoin market.
“Circle’s IPO is a watershed moment for the stablecoin space. It introduces a level of transparency, regulatory accountability, and investor scrutiny that’s never before existed for a dollar-backed digital asset. While Tether remains dominant in terms of raw volume, Circle’s public status may become a decisive factor for platforms and funds prioritizing compliance and risk-adjusted returns.”
Bundeep Singh Rangar, CEO of Pi Protocol, explains that the listing is especially appealing to institutions looking for reliability over opacity.
“Circle’s status as a listed company should confer a strong regulatory advantage. Investors and institutions tend to favor products known for transparency and oversight, and USDC appears well placed to meet that demand. Becoming a publicly traded entity, backed by audited statements, is likely to attract more risk-averse institutions.”
Yuriy Brisov, Partner at Digital & Analogue Partners, highlights how Circle’s increased disclosures set it apart from its competitors.
“Circle’s legitimacy, audited reserves, and SEC reporting could attract mainstream financial players to USDC. Tether’s model remains far more opaque. That gives Circle a positioning advantage with regulated institutions, especially those under compliance pressure.”
Alexis Sirkia, Chairman of Yellow Network, takes a more cautious stance, pointing to Tether’s entrenched position across existing infrastructure.
“In crypto, dominance is won by use case and integration. Tether remains the backbone of offshore liquidity and is deeply embedded across both centralized and decentralized trading chains. Circle’s regulation-friendly approach will attract more institutional capital over time, but Tether’s position will not be easily displaced.”
Joe, Co-Founder of DeAgentAI, notes that Circle’s timing aligns well with shifting policy in Washington.
“Regulatory clarity is definitely on Circle’s side. Having U.S. institutional support, especially as the government leans more pro-crypto, is a massive tailwind. For big banks and fintechs entering Web3, USDC is a safer choice.”
Eneko Knörr, CEO and Co-founder of Stabolut, views the IPO as more than just a company milestone. He sees it as a potential shift in how traditional financial institutions perceive stablecoins.
“It’s like allowing investors to invest in a central bank. That kind of visibility and trust is exactly what traditional institutions need to feel comfortable holding USDC or building new financial products around it.”
Kelghe D’Cruz, CEO of Pairs, believes Circle’s strategy is clear and deliberate.
“Circle going public is a direct shot at Tether. Public markets force clarity. If Circle pulls this off, USDC becomes the stablecoin institutions have to trust. It won’t flip Tether immediately, but it will tighten the gap.”
Tim Delhaes, CEO of Grindery, points out that legitimacy is just one part of the equation.
“This is a defining moment, but the market isn’t just about compliance. It’s about network effects, accessibility, and integration. USDT still holds a strong grip on offshore and emerging markets where liquidity outweighs regulatory concerns.”
The battle for dominance: USDC vs USDT
As Circle moves forward with its IPO and USDC’s market cap rises, the central question remains whether it can meaningfully challenge Tether’s dominance.
Robbie, CEO of Cycle Network, believes the competition between USDC and USDT boils down to regulation versus reach.
“The competition between USDC and USDT is essentially a battle between regulatory compliance and market inertia. USDT remains the most liquid stablecoin, especially on exchanges like Binance and OKX. It’s the default unit of account in much of Asia and dominates because of infrastructure, not narrative.”
He acknowledges that USDC is clearly the more trusted asset in DeFi, with transparent reserves and a strong presence in lending protocols like Aave (AAVE) and Compound (COMP).
But, in his view, Tether’s simplicity and speed continue to make it the default choice in high-frequency, cross-border use cases where compliance is less of a concern.
Blake Jeong, Co-CEO of IOST, points to evolving dynamics around utility and capital efficiency.
“In this new phase, dominance won’t just be about scale but also about utility and sustainable yield. The next wave of stablecoins may be backed by real-world assets and offer organic yield. That changes the conversation from reserve safety to active performance.”
He adds that yield-bearing designs could attract both institutional and DeFi users, particularly if they are paired with strong collateralization and flexible deployment across protocols.
Zino, CEO of GamerBoom, stressed the role of geography and market segmentation. He notes that while USDC’s regulatory compliance strengthens its position in Europe and the U.S., Tether’s foothold in emerging markets is difficult to challenge.
“Tether retains a 70 percent market share and remains deeply embedded in decentralized platforms and remittance corridors like TRON. While USDC’s IPO boosts its appeal in regulated spaces, Tether’s liquidity in high-volume, underregulated environments remains formidable.”
Dmitrij Radin, CEO of Zekret, sees the competition as a reflection of two distinct value systems within crypto.
“Circle has to open the books and follow U.S. compliance. Tether, by staying offshore and semi-anonymous, offers flexibility that many emerging market users value. The competition is no longer about who is right — it’s about which model works better under different constraints.”
While opinions vary on who holds the upper hand in the long run, there is broad agreement that the stablecoin market is likely to remain segmented.
Circle’s Coinbase dependence
As Circle embarks on its public journey, several risks have emerged. One of the main concerns is Circle’s heavy dependence on Coinbase, both as a partner and as a primary distribution channel.
Robbie highlighted that the $908 million payout to Coinbase for distributing USDC, which exceeds Circle’s net income of $156 million, shows the scale of this reliance.
“The payments to Coinbase are huge. Circle’s stablecoin business was originally a joint venture with Coinbase, and while the acquisition of Coinbase’s stake was strategic, it has led to a situation where a large portion of Circle’s growth is tied to one platform. If Coinbase faces regulatory issues or decides to shift focus, Circle could feel the impact significantly. This dependency creates a level of risk that could hurt the company’s margins and growth potential in the long run.”
Zino agrees, pointing out that Circle’s business model, driven by the payments made to Coinbase, could become a financial bottleneck.
“Circle’s dependence on Coinbase isn’t just a partnership — it’s a crucial part of their revenue model. With so much of their distribution tied to one exchange, any change in Coinbase’s priorities or a shift in its market position could severely impact Circle’s operations and profitability. It introduces unnecessary risk, especially in such a volatile market.”
Circle’s balance sheet risk
In addition to this concentration risk, Circle also faces exposure to fluctuating interest rates. The S-1 filing revealed that a 200-basis-point drop in interest rates could lead to a $414 million loss, primarily due to Circle’s reliance on interest income from reserves.
This is an area where Radin sees a key distinction between Circle and Tether.
“Circle’s financial strategy is highly sensitive to interest rate changes. With the bulk of its revenue coming from interest on reserve holdings like U.S. Treasuries, any substantial rate drop could shrink their earnings significantly. This contrasts with Tether, whose revenue sources remain more opaque, but it’s likely that their model is less exposed to the immediate fluctuations of the interest rate environment.”
Daria Morgen, Head of Research at Changelly, echoed Radin’s concerns, highlighting the vulnerability Circle faces due to its reliance on safe, low-yield assets.
“While Circle’s transparency is a strength in terms of regulatory compliance, it leaves them exposed when market conditions change. If rates fall, their revenue model could take a significant hit. Tether, by contrast, doesn’t disclose its full portfolio, which may allow it more flexibility to weather such changes.”
Circle’s interest rate risk is not just a concern for its operations but also highlights a larger strategic gap. Jeong noted that diversifying its revenue streams beyond interest on reserves should be a priority for Circle moving forward.
“To compete with Tether, Circle needs to expand its business beyond the confines of interest-bearing reserves. There are growing opportunities in areas like fiat ramps, liquidity settlement, and decentralized finance. Relying too heavily on the interest rate environment for revenue puts Circle at risk, especially if rates fall or remain volatile.”
Steven Pu, Co-Founder of Taraxa, brings the issue into sharp focus by pointing out that Circle must diversify to mitigate these risks.
“Circle’s focus on reserve income makes sense for regulatory reasons, but it leaves them vulnerable. With so much tied up in reserves and such heavy reliance on Coinbase, Circle’s business model is highly susceptible to shifts in market conditions. To stay competitive in the long run, Circle needs to broaden its revenue sources and reduce exposure to these single points of failure.”
Radin pointed out that this reliance on external financial forces is more apparent in Circle’s model than in Tether’s, where the lack of transparency leaves its financial stability open to speculation.
“Circle’s transparency about its reserves is a strength, but it also makes them more vulnerable. The fact that 99% of their revenue comes from interest on U.S. Treasury reserves means they’re at the mercy of rate fluctuations. Tether’s model, while opaque, likely shields them from some of this risk, as they’re not as open about where their revenue comes from.”
Sirkia views Circle’s need for diversification as not just a financial necessity, but also a strategic one.
“Circle’s focus on compliance is beneficial, but it’s not enough if their revenue model is too reliant on one source. The stablecoin market is evolving, and there are growing opportunities in areas like liquidity settlement and decentralized finance. If Circle doesn’t adapt, they may find themselves behind competitors who are more nimble in responding to market changes.”
The road ahead
To remain competitive, Circle needs to diversify its income streams and reduce its reliance on a single partner. Though regulatory clarity and institutional backing are advantages, they won’t be enough if market conditions shift drastically.
For Circle to challenge Tether’s dominance, it will have to rethink its strategy, focusing on expanding into areas like decentralized finance and liquidity settlement.
Without this diversification, Circle risks being outpaced by competitors better equipped to handle uncertainty and capitalize on emerging trends.
