Bitwise Head of Research Ryan Rasmussen believes investors misprice Circle's growth potential. The stablecoin market is expanding toward a multi-trillion-dollar valuation, and Circle's revenue streams will broaden beyond its current model.
Rasmussen's analysis points to payments infrastructure as a significant second business for Circle—one that moves beyond direct revenue generated from stablecoin reserves and positions the company to capture value from the systems that facilitate digital asset transfers.
The stablecoin sector now attracts banks, payment networks and fintech firms aiming to issue or distribute digital dollars. Federal regulation, including the GENIUS Act, clears the path for wider adoption.
Competition intensified with the Open Standard consortium's launch of Open USD a month ago. Backed by Coinbase, Visa and Mastercard, the new stablecoin was widely seen as a direct challenge to Circle and its $72 billion USDC, and the announcement triggered an immediate market reaction.
Circle's market value dropped by billions following the Open USD news. Shares fell as much as 20 percent and have not recovered. Over 140 launch partners supported Open USD, raising concerns among investors about USDC's commercial relationships.
Recent earnings calls from Open USD's high-profile backers presented a more mixed outlook. Executives at Coinbase, Visa and Mastercard said they intend to support multiple stablecoins and described Open USD as an additional network connection, not a replacement for USDC.
During Coinbase's second-quarter earnings call last week, CFO Alesia Haas reassured investors about its relationship with Circle. She said the exchange met conditions to renew its commercial agreement and will continue growing the USDC ecosystem. CEO Brian Armstrong said Coinbase is a multi-stablecoin platform.
Armstrong said Coinbase already supports USDC alongside Tether's USDT and PayPal's PYUSD. He said Open USD creates additional business and revenue opportunities for the exchange. Coinbase aims to support whichever stablecoins customers choose to use.
Visa CEO Ryan McInerney echoed this view during his firm's earnings call. He described Visa as a multi-coin, multi-chain entity. "Our role is not to pick winners," McInerney said.
Visa demonstrated that approach by launching its Visa Stablecoin Platform last month. The platform gives banks, fintechs and payment providers tools to access, store, redeem and move stablecoins. OUSD serves as the initial supported token.
Mastercard CEO Michael Miebach confirmed his company's support for USDC and the Paxos-led Global Dollar Network. Miebach described Open USD as "another coin that we will enable across our network" and said "choice has always been a key criteria and will be the same here in stablecoins."
Circle's Arc blockchain is a strategic move to extend the company's role beyond issuing stablecoins into the core infrastructure that facilitates their movement.
Separately, Circle's shares fell 25 percent on reports suggesting the removal of yield for stablecoin holders—a distinct event that added to broader investor scrutiny of the company's valuation and business model.
