5 Takeaways from Circle's IPO Filing

Circle’s hotly anticipated IPO filing just dropped, delivering a rare window into the financial workings behind USDC – the world’s second-largest stablecoin.

At its core, Circle is a revenue behemoth that generated $1.7B of interest off stablecoin reserves in 2024. The numbers also showcase a business built around plenty of trade-offs. After accounting for billion-dollar partner payments, incentives, and compliance costs, Circle isn't quite the profit monster that competitor Tether claims to be.

Circle is reportedly targeting a $4-5B IPO valuation, a pricing that suggests strong confidence in its market position. While the environment of declining interest rates and expanding stablecoin issuance by banks introduces new dynamics, these shifts also highlight the growing relevance of digital assets—offering Circle opportunities to adapt, innovate, and reinforce USDC’s unique value proposition.

Here are the top five insights we gleaned from Circle’s IPO filing. 👇

🏦 Cash Machine

Circle is the issuer of USDC, a dollar-pegged stablecoin project that is backed by over $60B of cash bank deposits and short-term U.S. Treasuries. Managing these assets returned $1.7B of top line revenue for Circle in 2024, and while this figure is no doubt impressive for an emerging crypto project, so are the associated expenses…

• In 2024, Circle paid $1B for “distribution and transaction costs,” an expense category largely devoted to partner payments that incentivize the use of USDC. The program’s biggest beneficiary was Coinbase, who perpetually receives 50% of all residual Circle revenues (i.e., reserve asset interest less Circle expenses and other distribution payments) and earned $908M from the program in 2024.
• Circle also incurs substantial payroll expenses to support its workforce of 900 employees. While slightly down from the previous year, compensation remained the company’s second-largest expense in 2024, totaling $263M.
• Meanwhile, as a regulated payments processor with a global presence, Circle must navigate a complex web of financial regulations. Accordingly, it bears significant general and administrative costs. In 2024, these expenses amounted to $137 million.

Despite experiencing its second consecutive profitable year, Circle’s $155M bottom line still falls far short of chief rival Tether’s reported $13B of net profits for 2024. 

🤌 Rate Sensitive

Given the short-term nature of Circle’s demand deposits and U.S. Treasury portfolio, company income is certainly exposed to fluctuations in interest rates.

While higher interest rates entail Circle earning more from every dollar of reserves, USDC supply fell during the most recent rate hike cycle as crypto markets went risk off. Although the revenue hit of declining interest rates will be partially offset by declining distribution expenses, according to Circle’s interest rate sensitivity projections (which held the supply of USDC constant), the company stands to lose $207M of profit for every 1% decrease in short-term interest rates.

🪨 BlackRock Deal

In April 2022, Circle signed a deal with BlackRock to collaborate on stablecoins for a three-year period. In March 2025, Circle and BlackRock signed a renewed deal, which is valid for the next four years and increases BlackRock’s share of Circle reserves to 90%. The deal also requires BlackRock to prioritize Circle stablecoins for all U.S. dollar payment stablecoin-related use cases and prohibits it from launching a competitive payment stablecoin.

Circle’s IPO filing unveils the fee schedule for their BlackRock partnership, which includes both investment advisory and administration fees and results in BlackRock earning approximately $100M per year.

🪙 Digital Asset Holdings

Circle’s primary use for digital assets is to pay blockchain gas fees, but the company may make investments in certain digital assets. As part of the IPO process, Circle has provided detailed information on the crypto assets it holds.

Circle’s $31M of crypto holdings isn't wildly substantial when compared to its multibillion-dollar balance sheet, but many SUI fans were enthused to see their favorite cryptocurrency comprising one-third of the company’s digital asset portfolio.

Newly approved accounting standards enable Circle to mark its digital asset investments to market every quarter and include the resulting gains (or losses) in its financial statements. Not only could a crypto boom benefit Circle’s underlying stablecoin business, it might also positively impact its digital asset portfolio.

💸 Binance Dealings

While it was no secret that Circle had a deal with Coinbase to promote USDC utilization, the company's IPO filing revealed the terms of its other major centralized exchange partnership – a December 2024 deal announced with Binance.

Binance is the sole group approved under Circle’s “Stablecoin Ecosystem Agreement.” In return for committing to store $3B of corporate funds in USDC, Binance received a one-time $60.25M payment from Circle and became eligible to receive ongoing monthly incentives for the next two years based on on-platform and treasury USDC holdings.

🧐 Conclusion

According to sources cited by Forbes, Circle intends to IPO somewhere between a $4-5B valuation, implying up to a 32x valuation multiple against 2024 earnings.

While such a multiple can be justified for high-growth companies like Circle, which has seen outstanding USDC supply double over the past year, impending regulatory changes that open stablecoin access to traditional banking institutions could mean more competition ahead for the first-mover. Its early deals, including a partnership with BlackRock which requires prioritization of Circle stablecoins, could provide a meaningful edge, however.

Investor interest in stablecoin issuers continues to rise, and Circle’s IPO ambitions reflect growing recognition of the sector’s potential. Despite uncertain macro conditions and a lofty reported valuation target, the company’s leadership, scale, and partnerships are plenty of reasons to take a closer look at the Circle opportunity.

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