Circle Earnings Preview: What to Watch for with Owen Lau

Circle's Potential and Market Disruption

• 💡 Circle and its stablecoin USDC are poised to disrupt several key markets, including cross-border payments, remittances, capital markets, and consumer payments.
• 🚀 Near-term opportunities are seen in remittances and cross-border payments, with broader market adoption expected over the next 3-4 years.
• 🤝 The increasing adoption of USDC by companies like Remitly highlights its growing role in facilitating payments within the fintech space.

Market Opportunity and Adoption

• 📈 The total addressable market (TAM) for USDC adoption in payments is substantial, potentially in the trillions of dollars.
• 🌐 Expect more partnerships with both payment companies and traditional finance institutions to leverage USDC for payment facilitation.
• 🛠️ Building the necessary infrastructure for widespread USDC adoption is identified as a key factor for future growth.

Coinbase vs. Circle Valuation

• 📊 Coinbase is trading at approximately 22 times 2026 EBITDA, while Circle is valued at about 57 times 2026 EBITDA.
• ⚠️ This significant valuation difference suggests Coinbase may offer more value compared to Circle, leading to an outperform rating for Coinbase.
• 📉 Coinbase experienced strong momentum before its earnings report, but the stock declined post-announcement due to high expectations, setting a precedent for Circle's upcoming earnings.

Ethereum's Value Proposition

• 🏦 More companies are expected to build treasuries on Ethereum, similar to existing Bitcoin treasuries.
• 💡 Ethereum offers more diverse use cases compared to Bitcoin, including the development of USDC.
• 💰 The ability to charge gas fees on Ethereum allows for more robust fundamental analysis and valuation modeling, making its intrinsic value potentially easier to estimate than Bitcoin's.