Impressive Financial Report but Decreasing Stock Price: Is Leading Stablecoin Project CRCL Still a Good Buy?

Original Article Title: "Bull vs Bear Debate: Is Leading Stablecoin CRCL Worth Buying? Why Didn't Strong Growth Financial Report Move the Stock Price?"

Original Article Author: Ding Dang, Odaily Planet Daily

Recently, the X Chinese community has sparked a heated discussion around "Circle (NYSE: CRCL) Worth Buying," with public opinion clearly divided into two major camps. One side sees it as a valuable target in the stablecoin race with significant institutional advantages, while the other side has repeatedly questioned the fragility of its profit model and potential cyclical risks. The clash of viewpoints reflects the drastically different judgment logic and expectation levels of the current market towards innovative projects.

Based on a large amount of public discussion and rational analysis within the community, Odaily Planet Daily has sorted out the core arguments and reasoning paths of both sides, attempting to present to readers the deeper structural disagreements behind the controversy beyond emotion and stance.

Background Overview

Since its listing on the NYSE on June 5, 2025, Circle (NYSE: CRCL) has undergone a complete cycle of a typical "narrative-driven asset" price curve: starting from an issuance price of $64, it quickly surged to a peak of $298.9, then gradually retraced, and around November 20, 2025, returned to near the issuance price, hitting a low of $64.9 and recently rebounding to around $83.9.

On November 12, 2025, CRCL released its first full quarter (Q3) financial report post-IPO: total revenue of $7.4 billion, a 66% year-on-year increase; net profit of $2.14 billion, EPS of $0.64, significantly exceeding market expectations. The key drivers were the USDC circulation soaring from $35.5 billion in the same period last year to $73.7 billion (+108%), and the rise in reserve asset yield in a high-interest-rate environment.

However, the stock price dropped 11.4% on the first day after the financial report was released, with a total weekly decline of 20%. Key pain points included high distribution costs ($448 million, accounting for 60% of revenue), operating expenses eroding profits, a high proportion of non-recurring revenue (71% from investment fair value changes), and the selling pressure caused by the unlocking of restricted shares. According to SEC filings, the IPO lock-up period ended after the Q3 financial report, and a significant number of potentially unlocked shares started on November 14.

Amidst these facts and the differing views, Odaily Planet Daily has compiled the opinions of individuals such as @0xNing0x, Jiang Zhuo'er, @Phyrex_Ni, @BTCdayu, @qinbafrank, facilitating readers in comparative analysis.

1. Sustainability of the Revenue Model: Is CRCL a Bank or Financial Infrastructure?

Jiang Zhuo'er believes that CRCL's profit primarily comes from "earning the spread": users convert money into USDC, Circle allocates these funds to low-risk assets such as U.S. Treasury bonds, earns interest income, and then deducts operating costs and distribution fees.

However, the problem lies in the fact that CRCL's profit distribution structure is extremely unfavorable to itself. According to the agreement, about 61% of the profit is to be shared with Coinbase, and Coinbase also holds a 22% share of USDC, which receives 100% of the earnings from this portion. In other words, the proportion of profit that CRCL can actually retain is very low.

More importantly, during a low-interest-rate period, the vulnerability of this "earning the spread" model will be greatly magnified. When the U.S. bond interest rate falls to around 2% in the long term and operating costs approach 1%, after deducting distribution fees, CRCL may even enter a loss-making state.

He believes that CRCL's current profit structure is not derived from business efficiency but rather from a regulatory arrangement that prohibits the issuer from directly paying national bond interest to users. This model is essentially a parasitic structure, and once policies are relaxed, or competitors circumvent restrictions indirectly through rewards, rebates, staking, and other means, CRCL's profit margin will be directly eroded.

@0xNing0x then further dissects CRCL's profit structure. CRCL's net profit is highly correlated with three core variables—USDC issuance scale, the Federal Reserve benchmark rate, and distribution channel costs.

Retrospectively analyzing historical financial data, these three variables do not have the same elasticity coefficient in relation to profit: the scale factor has an elasticity of about 2.1, the interest rate factor about 1.9, and the channel cost about 1.3. This means that changes in the USDC scale have the greatest impact on profit. According to calculations, for every $100 billion increase in USDC scale, there is theoretically an additional profit of about $1.14 billion, corresponding to approximately 21% of profit elasticity amplification.

Both of them believe that CRCL is akin to a tech-clad bank, but the market has priced it based on a valuation logic of tech stocks or even a "tech + bank" hybrid, which is a clear mismatch, and the stock price will sooner or later return to reality.

In contrast, BTCdayu and qinbafrank have a different understanding. They do not agree with the analogy that "CRCL is a bank." They believe that simplifying CRCL as a bank that earns the spread is a very surface-level observation.

In their view, what CRCL is doing is a typical "lose money first, then dominate" business. The profit sharing is not mandatory but a strategic choice. The essence is not to make a short-term profit, but to exchange for irreversible accumulation of scale, network effects, and user mindshare.

They draw parallels to companies like Amazon, Pinduoduo, JD, and others: these companies have all experienced years of losses, even being considered to have flawed business models, but later proved that these losses were the cost of "buying the market" rather than a structural defect. If you measure these companies by current profits, you can only conclude that they "should have closed down long ago."

In their view, the stablecoin market is a highly likely "winner-takes-all" race. Once USDC establishes an irreversible advantage in compliance and scale, today's seemingly heavy revenue sharing costs will be transformed into pricing power in the future. At that time, the state of "begging others to use" will turn into "others begging for access."

2. Will the rate cut cycle pierce the profit model?

Jiang Zhuo'er and some cautious people are very clear: interest rates are CRCL's lifeline.

As Circle's revenue highly depends on the U.S. bond yield, as long as the interest rate trend is downward, CRCL's revenue ceiling will be systematically compressed. Even if USDC's scale grows, in their view, it is challenging to fully offset the negative impact of the interest rate cycle.

They are more inclined to see CRCL as a "financial spread product" highly sensitive to macro interest rates rather than a technology company with inherent growth momentum.

The assessment of BTCdayu and qinbafrank is: Interest rates are not the key variable; scale is.

They believe that interest rate cuts are gradual rather than a one-time collapse. Meanwhile, the real breakout period for stablecoins has not yet arrived. Once stablecoin regulations are in place, more traditional financial institutions and corporate users start compliantly using stablecoins, and the issuance scale of USDC may transition from the current level of less than a hundred billion dollars to the $200–$300 billion range in a few years, or even higher.

They are not fixated on fine details like "next year's interest rate is 3% or 2.5%." In their view, as long as the growth rate of issuance scale far exceeds the rate of interest rate decline, the overall revenue scale will still be expanding.

They tend to believe that the current market overly focuses on the "interest rate" as an explicit variable, underestimating the more subtle but powerful force of "compliance driving scale migration."

More importantly, Coinbase's revenue sharing agreement is a "business negotiation outcome," not eternally immutable. As CRCL's market position shifts from "seeking distribution" to "being relied upon," the balance of power will naturally tilt.

Three, Stablecoin War: Will CRCL Be Overwhelmed by Giants?

Jiang Zhuo'er's assessment of the competitive landscape is somewhat pessimistic.

He believes that once traditional financial giants like JPMorgan fully enter the scene, a company of CRCL's size will struggle to cope with credit endorsements, channel resources, and regulatory influence. More importantly, giants have the complete ability to use subsidies, discounts, and even money transfers to capture market share.

In his view, CRCL does not have the anti-censorship properties of USDT, nor does it have irreplacability. Once stablecoins from traditional institutions begin to roll out, CRCL may be marginalized.

@BTCdayu, on the other hand, emphasizes that the essence of stablecoin competition is a battle for user mindset. USDC has already established an invisible moat through compliance, licensing, partnerships, and long-term accumulation. In the future, most funds may still flow to the safest and most accepted USDC. CRCL's strategic alliances with Coinbase, BlackRock, JPMorgan, and the upcoming U.S. regulated stablecoin bank charter further solidify its market position.

BTCdayu and qinbafrank, however, stress that this is a misjudgment of the logic of stablecoin competition.

They believe that stablecoins are not just financial products but typical "network products." The real moat is not capital strength but user mindset, security consensus, and migration costs.

They point out that JPMorgan is already working on stablecoin-like products, but more for an institution's internal circulation of "deposit tokens," belonging to a closed system, more like an enterprise version of QQ coins rather than USDC in an open network.

In their view, large bank stablecoins serve more of their own business system rather than building a globally open settlement network. What truly competes with USDC is a similarly open, compliant, composable stablecoin system, not the bank's own closed assets.

Four, Is Compliance a Moat or a Hidden Risk?

Jiang Zhuo'er believes that CRCL's profit model is built on the institutional advantage brought by regulatory vacuum. Once the rules change, the advantage could turn into a shackle.

BTCdayu and qinbafrank have completely opposite views.

They believe that the stablecoin path will eventually lead to a stage of "being embraced." The first to achieve compliance will become part of the national-level infrastructure.

In their logic, compliance is a safety mechanism, not a restraint. As the gray area is gradually squeezed, players like USDC, which have already deeply complied, are favored.

Five, Short-Term Trading Perspective: Unlocking, Selling Pressure, and Rhythm

Phyrex_Ni's perspective is more inclined towards the trading aspect.

His core focus is not long-term logic but the short-term supply-demand structure. He particularly notes that CRCL has entered a large-scale unlocking window, with executives, founders, employees, and early investors' lock-up periods gradually expiring.

He does not believe that these shares will necessarily be heavily sold off, but he views this as a typical stage of "sudden supply increase," where the stock price faces additional downward pressure.

His attitude is very clear: the current price is not expensive, but he is unwilling to bear the "time cost + opportunity cost" and would rather wait for uncertainty to dissipate before making a judgment.

Six, Payment Realities Barrier: Structural Restrictions of USDC in the US

Phyrex_Ni raises a rarely discussed but, in his opinion, crucial issue: tax attributes.

He points out that under the US tax system, USDC is not treated as "cash" but as an "asset." This means that every time USDC is used for payment, it may trigger capital gains tax calculation obligations.

This inherent nature of USDC makes it difficult to enter the US retail payment scene. Even if the regulatory path is clear, as long as the tax law remains unchanged, large-scale consumer payments are almost impossible to achieve.

In his view, this will limit USDC's payment ceiling in the US domestic market, making it more likely to stay in B2B, cross-border settlement, and financial backend instead of becoming true "digital cash."

Seven, Long-Term Space: Cyclical Target or Structural Opportunity?

qinbafrank is a typical long-term bull.

His logic is not complicated: stablecoins represent a massively scalable track that is far from reaching its ceiling. Transitioning from the current billions of dollars to tens of trillions in the future is not a fantasy.

He believes that in a market with tenfold potential, leading and pre-leading companies naturally enjoy a premium. Although CRCL is not the absolute first, it is the most compliant and easily accepted by the institutional system.

From his perspective, what the market truly should do is not be fixated on short-term fluctuations, but rather identify which companies qualify to participate in the "last-round centralization dividend" within this structural racetrack.

Summary

The cheaper the price, the more diligently it should be researched, rather than easily dismissed. What the current short position sees is short-term structural risks: high distribution costs, path dependency on interest rates, supply pressure from unlocking, and the potential impact of marginal changes in taxation and regulation. On the other hand, the long position bets on a longer-term structural dividend: the migration of global settlement demand, the institutionalization process of compliant stablecoins, and the "quasi-infrastructure attributes" once network products take shape.

Undeniably, for a long time to come, Circle may find it challenging to beat Tether, but likewise, new competitors will find it extremely difficult to replicate Circle's completed compliance path, channel network, and institutional trust accumulation in a short period.