Core Insights - Circle's stock price is under pressure, having dropped 56% from its peak this year, as investors evaluate the implications of the Federal Reserve's interest rate cuts on its revenue [3][6] - Tether's valuation is projected to reach $500 billion due to a capital raise of $20 billion for a 3% stake, positioning it as one of the largest private companies globally [4][6] Company Comparisons - Tether's valuation of $500 billion represents a multiple of 2.7x its assets, while Circle's market cap stands at $30 billion, reflecting a multiple of only 0.4x its USDC assets [7] - Tether and Circle operate under different business models; Tether's USDT is not audited by a Big Four firm, while Circle's USDC is backed by fiat and short-term treasuries [7][8] - Tether retains all profits, whereas Circle has a partnership with Coinbase that allows Coinbase to keep 100% of the interest income from USDC held on its platform [8] Market Dynamics - The Federal Reserve's interest rate cuts are expected to have a more significant impact on Circle, which relies on short-term US bonds, compared to Tether, which has a more diverse asset base that includes Bitcoin and gold [8] - Circle's stock price has seen a significant decline, moving from a high of $298 to a current price of $130, with resistance at $148 and a potential target of a year-to-date low of $107 [9][10]
Circle stock price as Tether's valuation balloons to $500 billion