We discussed Circle Internet Group Inc. (NYSE: CRCL) stock’s potential to reach $300 less than two weeks ago. Over the following week, the stock surged from $120 levels to around $240 – and sits at $225 currently. Is it possible for it to rise to $500 levels from this point?
Absolutely — we will elaborate on the upside case below, particularly as we gain more clarity concerning Circle's non-stablecoin revenue potential. However, given the rapid increase, it’s also crucial to warn investors: while the upside remains significant, downside risks also exist from macroeconomic changes, competitive pressures, and adoption trends that may not accelerate as anticipated.
Revisiting the $300 Case — and Extending It
Our previous analysis suggested that Circle could reach $300 per share based on three key factors:
- Growth in USDC circulation, increasing yield income on reserves
- Margin expansion as the platform develops
- Recurring revenues from enterprise APIs
These factors still hold true — and may be gaining momentum. However, given that the stock has doubled in just days, investors must consider: What could support another doubling from this level?
What Could Justify a $500 Valuation?
At $500 per share, Circle's market capitalization would be approximately $120 billion. What could warrant such a figure?
1. USDC Reserve Revenue Scaling Even Further
Circle currently benefits from an interest rate environment exceeding 5% and about ~$60 billion in USDC circulation. If this circulation expands to $250 billion in the next 3–4 years, and rates remain above 3%, gross yield revenue could attain $8 billion annually. Even after accounting for partner revenue sharing (notably with Coinbase), Circle might net $4-4.5 billion, nearly tripling current levels.
This alone could support earnings of $2 per share if the net margins close to 10% reported in recent quarters are maintained — however, that would likely undervalue the potential, as with increased scale, an enhancement in net margins may occur, potentially reaching a 20% net margin reported in FY2023. In this scenario, we would be looking at an EPS of $4 per share, which, however, would not lead us to the $500 valuation.
2. Infrastructure Revenue Becomes a Dominant Driver
The larger narrative revolves around non-stablecoin revenue stemming from Circle’s ambition to serve as the financial backbone for blockchain-based payment applications, which entails:
- Programmable payment APIs tailored for enterprises
- Smart contract wallets and custody SDKs
- On-chain FX, treasury, and compliance rails
Circle is effectively positioning itself as the “Stripe for digital dollars” — providing developer-grade infrastructure to facilitate businesses in integrating stablecoin payments, cross-border transactions, and on-chain financial operations into their foundational systems.
How significant could this become? If Circle secures even 15,000–20,000 mid-sized and large clients across fintech, tokenized asset platforms, and embedded finance applications, it could realistically achieve $3-3.5 billion in recurring infrastructure revenue.
This isn’t far-fetched. For context:
- Stripe serves millions of businesses worldwide and generates billions in revenue from its enterprise clients.
- Adyen collaborates with around 5,000 enterprise customers and earns over $1.5 billion annually, with an average client expenditure surpassing $300,000.
- Plaid, which specializes in data and account connectivity, serves over 12,000 financial applications.
Given the increasing demand for regulated, on-chain infrastructure — particularly among financial institutions and fintech companies — Circle possesses a viable path to capturing a significant share of the global enterprise addressable market. At $200K per year per client (considerably lower than Adyen), these services could yield software-like recurring revenue with higher profit margins compared to yield income and long-term operating leverage.
