Recent IPO Filing of Cryptocurrency Firm Circle Has Revealed

The recent IPO filing of cryptocurrency firm Circle has revealed that the company makes less money off the USD Coin (USDC) stablecoin than cryptocurrency exchange Coinbase.

The recent IPO filing of cryptocurrency firm Circle has revealed that the company makes less money off the USD Coin (USDC) stablecoin than cryptocurrency exchange Coinbase. In fact, Circle's largest expense was $908 million to Coinbase for distribution.

According to the filing, which was submitted on Thursday with the Securities and Exchange Commission, Circle's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $285 million for 2024. The company's largest expense was $908 million for "net revenue share paid to Coinbase for distribution, after considering USDC rewards."

The filing also shows that Circle's profits could be slashed by $414 million if the Federal Reserve were to lower interest rates by 200 basis points.

The stablecoin issuer is applying to list its shares on the New York Stock Exchange under the ticker "NYSE:C."

The company's S-1 is a reminder of Coinbase's (NASDAQ:COIN) power in the crypto ecosystem. In '24, Circle had $1.7b revenue and $285m EBITDA. Impressive financial profile. But its largest expense was $908m for distribution by Coinbase. Net of USDC rewards, Coinbase earns more than double the…pic.twitter.com/8yPLt9SKwW

— JJ Martin (@JJMartinDM) August 9, 2024

Notably, USDC, the second-largest stablecoin by market capitalization, saw impressive growth in 2024, with its circulating supply increasing by more than 78%. Its market cap currently stands at $60 billion, which makes USDC the second-largest stablecoin (only behind Tether's USDT).

The IPO filing shows that USDC, which was launched by Circle and Coinbase in 2018, has recorded $25 trillion in lifetime on-chain transaction volume, with more than $1 trillion worth of tokens being minted and redeemed since inception. There are also a total of 19 blockchains with native blockchain issuance.

The company has seen strong year-over-year revenue growth, which has more than doubled from 2022 to 2024 ($772 million to nearly $1.7 billion).

The company secured a $221.6 million profit last year after posting a whopping $758 million loss in 2022 during a brutal bear market.

Circle generates revenue with the help of interest on the reserves that back the popular stablecoin.

Coinbase recently reported its stunning Q4 revenue of $2.3 billion. Transaction fees accounted for the majority of the sum.

Circle's IPO filing comes amid stiffening competition within the sector as other players, such as PayPal (NASDAQ:PYPL) and Ripple, have launched their own highly regulated stablecoin products.