The stablecoin that Circle CEO Jeremy Allaire runs is meant to have a predictable, steady price. But the company, which scrapped a merger with a blank-check firm, defies valuation, says johnsfoley
Those unknowns make Circle’s worth anything but stable. Back in February there was $53 billion of its USD Coin in circulation, and the company was targeting $220 billion by the end of 2023. But now there’s only $43 billion. It’s a critical input for Circle’s value. The company takes customers’ money, hands them a dollar's worth of stablecoin and puts the real-world money in safe places like bank accounts and Treasury bonds, whose yields comprise the bulk of its revenue.
Circle’s boss Allaire may get a second crack at going public if these issues are settled. Until then, his stablecoin reserves ought to be earning a reasonable return – even if they’re shrinking. Circle holdsin short-dated Treasury bonds that might yield around 4.5%. Even if it shares a third of those proceeds with exchanges that trade USD Coin, it should still be making $1 billion in revenue a year – twice its estimate of annual operating costs from February.
Concord, a listed special-purpose acquisition company chaired by former Barclays chief Bob Diamond, agreed to buy Circle in July 2021. It reset the terms of the deal in February 2022, raising Circle’s implied valuation to $9 billion from $4.5 billion.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Spac deal for stablecoin issuer Circle collapsesSpecial purpose acquisition company Concord Acquisition Corp. undefined said Monday its deal to buy stablecoin issuer Circle Internet Financial has been...
Read more »
Circle and SPAC Concord mutually terminate business combinationCircle and Concord Acquisition Corp mutually ended their proposed business combination after the deal 'timed out.'
Read more »
USDC issuer Circle terminates SPAC merger with ConcordBoth crypto business valuations and SPAC mergers have performed poorly this year.
Read more »
Circle Nixes SPAC Deal With Concord, Still Nurses Public Listing AmbitionHowever, the USDC issuer still wants to go public at some point.
Read more »
Stablecoin Firm Circle Ends SPAC DealCircle Internet Financial, the company that operates the USD Coin stablecoin, is ending its current attempt to go public though a special purpose-acquisition merger.
Read more »
Crypto Giant Circle No Longer Going Public.jerallaire says that the company still intends to go public in the future despite scrapping the SPAC deal
Read more »