"$CRCL is the world's best business model"
—If only one article could explain CRCL
I. In the future, there will only be three businesses in the crypto: BTC, trading, and stablecoins.
BTC is comparable to digital gold;
Trading & Investment | _2024111120231_ | _2024111120232_ | _2024111120233_ | ;
Stablecoins are the most powerful and successful application in the crypto. Starting from the crypto, they have taken over Wall Street, from putting all securities on the blockchain to equivalent US dollars. Behind this is the US debt reduction and the new digital dollar order. In short, compliant stablecoins are the second growth curve for the US dollar and US Treasury bonds!
Second, define the nature of the business: Stablecoins are the best business model in the world. When investing, the business model should be the primary consideration.
Stablecoins are the best business in the world.
If Bitcoin represents the first time humans have acquired private property, its significance is no less than that of humans walking upright for the first time—the moment that transformed monkeys into humans.
So, stablecoins represent the first time that the "private sector" has shared the power to mint coins: printing money and collecting interest worldwide.
To understand this, some logic is provided for reference:
1. Stablecoins rely on economies of scale and will eventually exhibit a 2/8 distribution.
This means the largest stablecoin has captured the largest market share.
People naturally value the security of their money, especially large sums, and will naturally gravitate towards the largest stablecoins, just as large sums of money are reluctant to go to small banks.
However, stablecoins and ordinary fiat currencies have another significant difference: leading stablecoins and new/small stablecoins have different on-chain scenarios. Large stablecoins have the most comprehensive support from various apps in terms of chains, currencies, on-chain depth/liquidity, etc., while small and new stablecoins have fewer scenarios, which will further verify this conclusion.
2. The largest stablecoins must be compliant, not non-compliant.
Compliance is about rules, but also about clearing out the gray areas. The gray areas will eventually be very small, but they will always exist.
Just as USDC is rated "excellent" by S&P and has obtained an OCC license, it continues to expand its compliant users and scenarios; while USDT is rated "poor" and is buying sports teams, mining farms, gold, and electricity.
3. Banking is a tough business. They make a little money from lending and earning interest spreads, but they have to worry about the risk that companies like Evergrande won't be able to recover their money.
Stablecoin companies like CIRCLE, on the other hand, collect money with zero interest and only need to reward users for ease of use. The money they receive is used to buy US Treasury bonds to generate interest. The essence of this lucrative business lies in the strong demand from the United States to sell US Treasury bonds globally, expand the dollar's application scenarios, and increase the number of dollar users.
4. Leading compliant stablecoins will issue their own blockchains, obtain banking licenses, and become financial infrastructure, integrating into the global banking and fiat currency system. They will permeate all scenarios, including settlement, payment, cross-chain transactions, and lending. The larger the scale, the more lucrative the various spreads and fees will be, making them the new-era VISA—but not just VISA, because on-chain demand will be 10 times greater than traditional methods, such as agents.
5. Stablecoins are the hard currency for agent communication in the AI era. In the future, agents will also be a trillion-dollar industry. Dialogue and transactions between AI can only use stablecoins because agents cannot open accounts, and banks cannot build systems to connect with a large number of agents. However, stablecoins can, as they are naturally decentralized on the blockchain and can achieve full automation, making it convenient for agents to use.
But why is it $CRCL? USDT is bigger than it, so wouldn't it have a better chance?
Third, compliance will clear out the market, and USDC will be the biggest beneficiary.
USDT does not comply with regulations, cannot comply with regulations, and does not need to comply with regulations.
USDC was created for compliance purposes. COINBASE, as a shareholder, is responsible for its promotion and distribution. BlackRock signed a memorandum of understanding with USDC: "You deposit with me, I'll help you promote it and guarantee that I won't do anything else with stablecoins."
JPMorgan Chase (the behemoth that's going to sell off its MicroStrategy program) is going to use USDC as collateral. With the stablecoin bill in effect, USDT will face further challenges.
I predict that in the first half of next year, we will see USDC continue to expand rapidly and approach the size of USDT.
The stablecoin market needs to reach 3 trillion dollars, not just relying on the current size of the crypto—but on institutions, payments, and cross-border transfers. All of the new dollar system requires compliant stablecoins.
Two major pieces of news emerged in early February:
First, DTCC received SEC approval to put US stocks on-chain, including all Russell 1000 stocks. Stocks and cryptocurrencies will merge; as long as buying is possible on-chain, it will inevitably use stablecoins like USDC, leading to a surge in demand. This is similar to how people buying BTC in the crypto use USDT as a medium of exchange.
A common but extremely foolish view is that on-chain US stocks are a false demand because people in the crypto don't speculate on them—that is, they don't realize that putting US stocks on-chain is not for the crypto, but rather a transformation of the US stock market itself. The amount of money in the crypto and the number of retail investors are negligible in this big picture.
Secondly, CIRCLE obtained the OCC license, the first stablecoin banking license in human history issued by the US banking regulatory agency. CRCL has thus become a formal financial infrastructure, and its USDC will be directly equivalent to the US dollar backed by the state, fully opening up the possibility for all banks, investment institutions, pension funds, etc. to hold USDC.
Fourth, the competition for stablecoins is much tougher than imagined. Issuing new stablecoins according to the rules is easy; anyone can issue one. So, would this be a very simple and highly competitive field? No.
Leaving aside CIRCLE's current advantages, including various licenses in dozens of countries, and the fact that the Stablecoin Act directly copied CIRCLE's model, just considering that FDUSD, which the world's largest exchange has been supporting for two or three years, only has a market capitalization of a few billion US dollars and is limited to Binance, one can guess the extent of the problem.
USDC has been deployed on dozens of chains and hundreds of exchanges. It has a very mature and extensive support system, from on-chain development kits and APIs to inter-chain liquidity support and cross-chain protocol deployment. It would take any new stablecoin several years to reach this level. However, competitors will not have much time, because the bigger the snowball, the faster it can roll.
Besides CRCL, other compliant stablecoins include PYUSD and USD1. PayPal, with tens of millions of users, should theoretically be very strong, but despite rapid growth in recent months, it's actually in a difficult position. Subsidies are burning through cash every day; if it stops, users will leave.
PayPal's predicament is also why other giants, including BlackRock, don't get involved: it requires a lot of money, a strong team, rich experience, and the ability to sustain losses, etc.
Binance is great, so why don't BlackRock, Goldman Sachs, and Palpal create their own stablecoins and use them directly?
HYPE is great, so why don't BlackRock, Goldman Sachs, Palpal, and Amazon create their own stablecoins and use them directly?
Fifth, the larger the stablecoin, the lower the operating cost. Stablecoins are a scalable and networked business model. The larger the scale, the more invincible it becomes, and the lower the marketing costs.
In the early stages, all interest needs to be paid out to expand the scale, but when the scale reaches a certain point, no further promotion is needed. The existence itself is the greatest promotion—just like the use of the US dollar, once the rules are set, the later stages are based on inertia and scenarios.
In international trade settlements, once the rules and practices of using the US dollar are established, why is it so difficult to switch to other currencies? The answer lies in understanding CRCL.
Currently, under the US debt-reduction strategy, CIRCLE's position is somewhat similar to Lockheed Martin's position in the military industry, with all resources being poured into it.
VI. CRCL's entry into the S&P 500 is a planned path.
CRCL is listed on the NYSE, not Nasdaq. This move is to position CRCL not as a tech stock, but as a new-era financial infrastructure.
CRCL's allies are all there, including BlackRock and Goldman Sachs. Based on a market capitalization of around 20 billion and several consecutive quarters of profitability, it is expected to be included in the S&P 500 index by the end of next year, thereby attracting nearly 10 billion in passive buying. With a current market capitalization of 16 billion, 100% inclusion in the S&P index would mean 100% future passive fund purchases.
VII. Cost price is a clear anchor.
The IPO price was around 30, and the opening price was 60, so 60 is the secondary bottom, and it will be difficult to fall below it.
At 30, it's cheaper than a broken bank, but the two are incomparable. If it drops to 30, I might liquidate all my BTC to buy it all. If it drops to 30, I'll try to buy the dip again, and then I'll be out of money and All In.
risk:
1. Interest rate cuts and growth: If the USDC's size doesn't grow fast enough, and interest rate cuts are very aggressive, its market capitalization will feel that its revenue is decreasing and will fall, potentially even plummeting. However, I think this point mainly depends on growth.
2. The leading player is being challenged, such as PYUSD. Although its current scale is negligible, it has been growing rapidly recently. Will users experience explosive growth through the PayPal platform? Of course, based on the current situation, I think it won't lose, but I also think it's worth observing in the long term.
*** Looking back ten years from now, perhaps this thing will be like Duan Yongping buying NetEase. I missed Google's 160, and afterwards I learned that I should trust myself, not the price, not the masses—more precisely, trust my own research. The more research I do, the more position I should allocate. (Relevant to the context: This article was written on November 28, 2025, starting with purchases at around 60. The content was revised and improved on December 15th. This article is included in the stablecoin section of http:/DAYU.XYZ.)
