The recent IPO of Circle Internet Group has garnered investor attention, but many experts believe the biggest beneficiary may be Coinbase Exchange due to its partnership with Circle regarding the stablecoin USDC.
Coinbase and Circle's USDC Partnership
A key factor behind Coinbase Exchange's competitive edge is its revenue-sharing agreement with Circle. According to Michael Nadeau on X, Coinbase retains 100% of revenues generated when USDC is minted on its platform and earns 50% of the reserve income from USDC held outside Coinbase. This agreement has become a significant revenue driver amid the growing supply of USDC, which currently exceeds $60 billion.
Circle Stock's First Month: Dynamics and Investor Interest
In the early days of trading, Circle's stock showed notable growth, starting at $82.84 and reaching $107.70 by June 6. The trading volume was nearly 60 million shares, indicating high investor interest. However, some analysts, including Wyatt Lonergan, warn about the potential for a price correction in the future.
Analysis of Circle Stock Sustainability in the Market
Despite Circle's market cap exceeding $10 billion, concerns remain about its potential to grow beyond this level. Circle is actively working on expanding its Payments Network and tokenizing USDC, which may help unlock additional value. However, competition from companies like Ripple and PayPal, alongside concerns about income streams, may exert pressure on Circle's stock.
Coinbase, due to its position in the USDC revenue structure, may derive greater benefits even if Circle's growth slows or valuation declines. The partnership between the two companies opens opportunities for Coinbase to maintain or increase its earnings in the future.
