Herman Jin
Formerly in Asia FICC at Goldman Sachs, Macro & Semiconductor Investing
Circle is not worth trading, because the popular story behind it does not hold up. Claims that AI agents cannot pass KYC and so must transact in USDC, or that AI interactions will use tokens to buy tokens, are a story pundits invented and talked themselves into believing. Per @yangkongloong, many crypto influencers repeat it, but such claims did not originate with them. x.com x.comÂ
Circle faces a senior management transition without a clear replacement after its CFO resigned abruptly, a risk not worth ignoring. Capital is better kept in the highest-conviction areas, semiconductors and AI infrastructure, though the medium-term view on bitcoin stays bullish and this call could prove wrong. x.comÂ
Circle faces pricing pressure because stablecoin infrastructure has low barriers to entry, which is why it stays an underweight with only small exposure. The risk showed when Circle fell 13% as Stripe, Coinbase and BlackRock backed a rival stablecoin, Open USD. x.com x.comÂ
Circle is building a network-effect moat by tying the biggest exchanges and payment players to USDC, to compete as the default settlement asset in trading and payments. Its deeper Binance deal is now its only exchange tie combining equity, incentive fees and wallet integration, second only to Coinbase. Coinbase, Binance and Hyperliquid hold where money sits; Intuit, JCB, Nium and Tazapay move it; CPN and Arc aim to settle it. Dominance isn't secured yet, and rivals are expanding too. x.com x.comÂ
Circle faces real stablecoin competition as Open Standard launched its own stablecoin, Open USD, straight into USDC's lane. Circle stock fell 16.55% in 24 hours to $62, adding to last week's exit from five Russell Growth indexes. x.comÂ
Circle's valuation is far too high to consider right now, given risks from crypto sentiment and margin pressure. That holds despite strong momentum: Q4 revenue rose 77% to $770M with a solid EPS beat, it has launched institutional payment platforms and expanded African partnerships, and potential US stablecoin legislation is a tailwind. x.comÂ
Circle may be the only investment that truly makes sense for anyone bullish on crypto because of AI agents. A post the author replies to argues nothing is more obvious than stablecoins, with supply, transaction volume and use cases set to soar. x.com x.comÂ
Coinbase remains a buy-the-dip crypto holding, but now ranks behind Circle. It has lagged amid prolonged CLARITY Act uncertainty, faces revenue risk from the ongoing USDC custody renegotiation with Circle, and miners shifting to AI temper the trading-volume outlook. Circle is the preferred stablecoin exposure because stablecoins are the natural payment rail for AI agents. Basket weights stay unchanged, with a lean toward adding to Circle as the highest-conviction name. x.comÂ
Circle's long-term multi-bagger thesis, that USDC becomes a key part of next-generation payment rails, no longer looks on track. In just the past few days, 140 entities, including many major names, partnered with OUSD, and Robinhood announced a 7% yield program via USDG. Circle can still be a successful business, and its fall to the targeted ~$64 entry level looks justified by fundamentals, so the 'Circle is poised to dominate' case is crumbling. x.comÂ
Circle looks set to turn back into an uptrend from a massive weekly base, with insider selling pressure likely exhausted. Nearly two years after the IPO, insiders and VCs who wanted to sell are probably gone, and the crypto theme is hot. x.comÂ
Circle does not look like a buy after its drop if a new rival stablecoin has broken its business model. Per @puckrin, Stripe, Coinbase, Visa, Mastercard, BlackRock and more than 140 others launched Open USD, which charges zero minting fees and hands reserve yield back to partners; that yield is Circle's business model, which @puckrin calls an existential threat. Circle stock fell 14% on the news. x.com x.comÂ