Bull-Bear Debate: Is the Profit Moat of Stablecoin Leader CRCL Solid?

Author: Dingdang, Odaily Planet Daily

Original Title: Fierce Debate: Is Stablecoin Leader CRCL Worth Buying? Why Can’t High-Growth Earnings Boost Its Stock Price?

Recently, the Chinese X community has seen heated debates over “Is Circle (NYSE: CRCL) worth buying?”, with public opinion clearly split into two camps. One side views it as a valuable asset with significant regulatory advantages in the stablecoin sector, while the other side frequently questions the fragility of its profit model and potential cyclical risks. The clash of views reflects the market’s vastly different logical frameworks and expectations for innovative projects.

Odaily Planet Daily, drawing from extensive public discussions and rational analyses within the community, has summarized the core arguments and reasoning paths of both sides, aiming to present readers with deeper structural differences behind the controversy, beyond surface-level emotions and stances.

Background Brief

Since Circle (NYSE: CRCL) listed on the NYSE on June 5, 2025, it has experienced a typical “narrative-driven asset” price curve: surging from its $64 IPO price to a peak of $298.9 in a short period, then gradually falling back, and, around November 20, 2025, returning near its IPO price, bottoming at $64.9, and recently rebounding to about $83.9.

On November 12, 2025, CRCL released its first full quarterly (Q3) earnings report since IPO: total revenue of $740 million, up 66% year-over-year; net profit of $214 million, EPS of $0.64, significantly exceeding market expectations. The key drivers were USDC circulation rising from $35.5 billion a year ago to $73.7 billion (+108%), and increased reserve asset yields in a high-interest environment.

However, after the earnings release, the stock dropped 11.4% on the first day and 20% over the week. Key pain points include high distribution expenses ($448 million, 60% of revenue), operating costs eroding profits, a high proportion of non-recurring income (71% from investment fair value changes), and sell pressure from post-IPO share lockup expirations. According to SEC filings, the IPO lockup ended after the Q3 report, with a massive potential unlock from November 14.

Based on these facts, Odaily Planet Daily has compiled the views of @0xNing0x, Jiang Zhuoer, @Phyrex_Ni, @BTCdayu, @qinbafrank, and others for readers to compare and analyze.

1. Is the Profit Model Sustainable: Is CRCL a Bank or Financial Infrastructure?

Jiang Zhuoer believes CRCL’s profits essentially come from “interest margin”: users exchange cash for USDC, Circle allocates these funds to low-risk assets like US Treasuries, earns interest, then deducts operating costs and channel sharing.

The problem is that CRCL’s profit-sharing structure is extremely unfavorable to itself. By agreement, about 61% of profits go to Coinbase, and Coinbase holds 22% of USDC, with 100% of those returns going to itself. In other words, the actual profit CRCL can keep is very low.

More critically, in a rate-cut cycle, this “interest margin” model’s fragility is greatly amplified. When US Treasury yields fall to around 2% long-term and operating costs approach 1%, after channel sharing, CRCL could even become loss-making.

He argues that CRCL’s current profit structure isn’t due to business efficiency but regulatory arrangements forbidding issuers from paying Treasury interest directly to users. This mode is essentially parasitic: once policy eases or competitors use rewards, rebates, staking, etc., to bypass restrictions and share profits, CRCL’s profit space could be wiped out.

@0xNing0x offers a more detailed breakdown of CRCL’s profit structure. CRCL’s net profit is highly correlated with three core variables—USDC issuance scale, the Fed benchmark rate, and distribution channel costs.

Historical financial data shows these three have different profit elasticities: scale factor at about 2.1, rate factor at 1.9, and channel cost at 1.3. This means changes in USDC scale have the greatest impact on profit. Calculations show every $10 billion increase in USDC scale theoretically brings about $114 million incremental profit, a 21% profit elasticity amplification.

Both agree CRCL is akin to a bank disguised as a tech company, but the market prices it as a tech stock or a “tech + bank” hybrid, which is a mismatch—the stock price will eventually revert to reality.

In contrast, BTCdayu and qinbafrank disagree with the “CRCL is a bank” analogy. They believe seeing CRCL as simply an interest margin bank is superficial.

From their perspective, CRCL is a classic “lose money first, then monopolize” business. Profit sharing isn’t forced, but a strategic choice—not for short-term gains, but for irreversible accumulation of scale, network effects, and user mindshare.

They compare it to Amazon, Pinduoduo, JD.com: all lost money for years and were criticized for their business models, but later proved such losses were “buying the market,” not structural flaws. Judging by current profits, these companies “should have gone bankrupt” long ago.

They see the stablecoin market as likely “winner-takes-all.” Once USDC gains an irreversible advantage in compliance and scale, today’s heavy profit sharing will become future pricing power. The status of “begging others to use” will flip to “others begging to integrate.”

2. Will a Rate-Cut Cycle Break the Profit Model?

Jiang Zhuoer and other cautious voices are clear: interest rates are CRCL’s lifeline.

Since Circle’s revenue depends heavily on Treasury yields, as long as rates trend down, CRCL’s revenue ceiling will be systemically compressed. Even if USDC scale grows, they believe it’s hard to fully offset the negative impact of the rate cycle.

They prefer to see CRCL as a “financial interest margin target” highly sensitive to macro rates, rather than a tech company with endogenous growth.

BTCdayu and qinbafrank argue: rates aren’t the key variable—scale is.

They believe rate cuts are gradual, not a one-off collapse. Meanwhile, stablecoins haven’t hit their real explosion point. Once a stablecoin bill passes and more traditional financial institutions and enterprises start using stablecoins compliantly, USDC issuance could jump from under $100 billion now to $200–300 billion in a few years, or higher.

They aren’t fixated on whether next year’s rate is 3% or 2.5%. As long as issuance growth far outpaces rate declines, total earnings will still expand.

They feel the market is overly fixated on the visible “interest rate” variable, underestimating the stronger, hidden force of “compliance-driven scale migration.”

More importantly, the Coinbase profit-sharing agreement is a “business negotiation result,” not set in stone. As CRCL’s market position shifts from “seeking distribution” to “being relied on,” bargaining power will naturally tilt.

3. Stablecoin Wars: Will CRCL Be Crushed by Giants?

Jiang Zhuoer is pessimistic about the competitive landscape.

He feels that once traditional giants like JPMorgan enter the fray, CRCL won’t be able to compete in terms of credibility, channel resources, or regulatory influence. More importantly, giants can subsidize, cut prices, or even take losses to seize market share.

In his view, CRCL lacks the censorship resistance of USDT and isn’t irreplaceable. Once traditional institutions’ stablecoins roll out, CRCL could be marginalized.

@BTCdayu, however, emphasizes that stablecoin competition is a battle for user mindshare. USDC has built an invisible moat through compliance, licenses, partners, and long-term accumulation. Most funds will likely still flow to the safest, most recognized USDC. CRCL’s strategic alliances with Coinbase, BlackRock, JPMorgan, and its pending U.S. stablecoin bank license further strengthen its position.

BTCdayu and qinbafrank stress that this is a misreading of stablecoin competition logic.

They argue stablecoins aren’t just financial products, but classic “network products.” The real moat isn’t capital strength, but user mindshare, consensus on safety, and switching costs.

They note that JPMorgan already offers quasi-stablecoin products, but these are more like “deposit tokens” for internal institutional use—closed systems, like an enterprise version of Q Coin, not an open network like USDC.

In their view, big bank stablecoins mainly serve their own businesses, not build a global open clearing network. USDC’s real competitors are other open, compliant, composable stablecoins, not banks’ closed assets.

4. Is Compliance a Moat or a Hidden Risk?

Jiang Zhuoer argues CRCL’s profit model is built on regulatory arbitrage. If rules change, its advantage could become a shackle.

BTCdayu and qinbafrank see the opposite.

They believe stablecoins will inevitably be “brought into the fold.” Whoever completes compliance first becomes part of national infrastructure.

In their view, compliance is a clearing mechanism, not a constraint. As grey areas shrink, players like USDC with deep compliance layouts benefit.

5. Short-Term Trading: Unlocks, Sell Pressure, and Timing

Phyrex_Ni takes a more trading-focused view.

He isn’t focused on long-term logic, but short-term supply-demand structure. His main concern is that CRCL has entered a large unlock window, with lockups expiring for executives, founders, employees, and early investors.

He doesn’t believe all these shares will be dumped at once, but sees this as a classic “sudden supply increase” phase, adding extra downward pressure on the stock.

His stance is clear: the current price isn’t expensive, but he doesn’t want to bear “time and opportunity costs,” preferring to wait for uncertainty to clear before deciding.

6. Real Payment Barriers: Structural Limits of USDC in the U.S.

Phyrex_Ni raises a rarely discussed but crucial issue: tax status.

He notes that under U.S. tax law, USDC isn’t treated as “cash,” but as “property.” This means every USDC payment could trigger capital gains tax calculations.

This makes USDC inherently difficult to enter U.S. retail payments. Even if regulation is smooth, unless the tax law changes, large-scale consumer payments are nearly impossible.

He believes this limits USDC’s payment ceiling in the U.S., keeping it mainly in B2B, cross-border settlement, and financial backend roles, rather than becoming true “digital cash.”

7. Long-Term Potential: Cyclical Asset or Structural Opportunity?

qinbafrank is a classic long-term bull.

His logic is simple: stablecoins are a huge market, far from the ceiling. Going from hundreds of billions today to trillions in the future isn’t far-fetched.

He believes that in a 10x market, leaders and near-leaders naturally enjoy premium rights. CRCL may not be the absolute number one, but it’s the most compliant and institutionally acceptable.

From his perspective, the real task isn’t worrying about short-term swings, but identifying which companies have the right to participate in the “final round of consolidation dividends.”

Summary

The cheaper the price, the more seriously it deserves research—not easy dismissal. Current bears focus on short-term structural risks: excessive distribution costs, reliance on rate path, unlock-driven selling pressure, and potential shocks from tax and regulatory changes. Bulls are betting on long-term structural dividends: the migration of global settlement demand, the institutionalization of compliant stablecoins, and the “quasi-infrastructure” nature of network-based products once they mature.

Undeniably, for a long time to come, Circle may struggle to beat Tether—but likewise, new competitors will find it extremely difficult to replicate Circle’s compliance pathway, channel network, and institutional trust in a short time.