"$CRCL is the Best Business Model in the World"

—— If I could explain CRCL in just one article

1. In the future, there will only be three businesses in the crypto world: BTC, trading, and stablecoins

BTC is the digital gold;

Trading investments include $BNB, $COIN, $HYPE;

Stablecoins are the strongest and most successful application in the crypto world, starting from crypto to take over Wall Street, moving all securities on-chain to equivalent dollars. Behind this is the U.S. debt reduction and a new digital dollar order. To explain it in one sentence: compliant stablecoins are the second growth curve of the dollar and U.S. Treasury bonds!

2. First, let's define: Stablecoins are the best business model in the world

When investing, the first thing to look at is the business model.

Stablecoins are the best business in the world.

If Bitcoin represents humanity's first mastery of private property, its significance is akin to humanity's first achievement of upright walking— that moment transformed monkeys into humans.

Then, stablecoins represent the first time the "public" shares the right to mint currency: printing money and collecting interest worldwide.

To understand this, here are some logical points for reference:

1. Stablecoins emphasize economies of scale, ultimately presenting a 2/8 distribution.

This means the largest stablecoin will capture the largest market share.

People naturally prioritize the safety of their money, especially large sums, and will tend to seek out the largest stablecoin, just as large sums of money are reluctant to go to small banks.

However, stablecoins differ significantly from regular fiat currencies; the leading stablecoins and new/small stablecoins have different on-chain scenarios. Large stablecoins have the most chains, currencies, and comprehensive support from various apps in terms of on-chain depth/liquidity, while smaller, newer ones have fewer scenarios, further validating this conclusion.

2. The largest stablecoin must be compliant, not non-compliant.

Compliance is a rule and also a cleanup; the proportion of gray areas will ultimately be very small, but it will always exist.

For example, USDC has been rated as excellent by S&P and has obtained an OCC license, continuously expanding its compliant users and scenarios; while USDT is rated poorly, engaging in buying sports teams, mining sites, and gold.

3. Banking is a tough business; lending earns a small interest margin, but there is a risk of not being able to recover money from companies like Evergrande.

In contrast, a stablecoin company like CIRCLE collects money at 0% interest and only needs to provide user-friendliness, while the money collected is directly used to buy U.S. Treasury bonds for interest. The essence of this good business lies in the strong demand from the U.S. to sell Treasury bonds globally, expanding the dollar's scenarios and increasing the number of dollar users.

4. Leading compliant stablecoins will issue their own chains, obtain banking licenses, and become financial infrastructure, integrating into the global banking and fiat currency systems, permeating all scenarios such as settlement, payment, cross-chain, and lending. The larger the scale, the more various spreads, fees, etc., will be earned, becoming the VISA of the new era—but not limited to VISA, as on-chain demand will be ten times greater than traditional methods, such as AGENT.

5. In the AI era, stablecoins will be the hard currency for AGENT communication. In the future, AGENT will also be a trillion-dollar track. Conversations and transactions between AIs can only use stablecoins because AGENT cannot open accounts, and banks cannot create systems to connect with the vast AGENT usage, but stablecoins can, as they are inherently decentralized on-chain, enabling complete automation and facilitating AGENT usage.

But why $CRCL? Isn't USDT larger and potentially more promising?

3. Compliance is a cleanup; USDC will become the biggest beneficiary

USDT does not pursue compliance, cannot pursue it, and does not need to.

In contrast, USDC was born for compliance, with COINBASE as a shareholder responsible for promotion and distribution. BlackRock has signed a memorandum with USDC, stating that if you deposit with us, we will promote you and ensure no other stablecoins are involved.

JPMorgan (the giant that wants to kick MicroStrategy out) plans to use USDC as collateral. Once the stablecoin bill is enacted, USDT will face further blows.

I guess we should see USDC continue to expand rapidly and approach the scale of USDT in the first half of next year.

The scale of stablecoins needs to reach $3 trillion, not relying on the small volume of the crypto world—but on institutions, payments, and cross-border transfers. Under the new dollar system, compliant stablecoins are essential.

In early February, two major announcements emerged:

First, DTCC received SEC approval to put U.S. stocks on-chain, with the Russell 1000 fully integrated. Stock coins will merge; as long as it can be bought on-chain, it will definitely use stablecoins like USDC, leading to terrifying demand growth. Similar to how people in the crypto world use USDT as a trading medium to buy BTC.

A common yet extremely foolish viewpoint is that on-chain U.S. stocks are a pseudo-demand because crypto people do not trade—failing to realize that putting U.S. stocks on-chain is not for the crypto world but a transformation of U.S. stocks themselves. The small volume of the crypto world and the retail investors can be ignored in this larger picture.

Second, CIRCLE obtained an OCC license, the first stablecoin bank license issued by a U.S. banking regulatory agency in human history. From now on, CRCL becomes a formal financial infrastructure, and its USDC will be directly equivalent to the dollar backed by the state, completely opening up the possibility for all banks, investment institutions, and pension funds to hold USDC.

4. The competition for stablecoins is much tougher than imagined

Issuing new stablecoins according to the rules is easy; anyone can do it, so will this be a very simple and competitive track? No.

Not to mention CIRCLE's current advantages, including various licenses from dozens of countries, and the "Stablecoin Bill" directly copying CIRCLE's model, just look at how long it took for the universe's largest exchange to support FDUSD, which took two to three years to reach a market value of only a few billion dollars, limited to Binance.

USDC is currently deployed across dozens of chains and hundreds of exchanges, with a very mature and extensive support system, from on-chain development kits and APIs to inter-chain liquidity support and cross-chain protocol layouts. Any new stablecoin aiming to reach this state will also require many years—but the time left for competitors will not be much, as the larger snowball may roll faster.

Besides CRCL, there are other compliant stablecoins like PYUSD and USD1. Originally, PAYPAL should be strong with its tens of millions of users, but although it has grown rapidly in recent months, it is actually in a difficult position, burning cash daily on subsidies; without subsidies, users will leave.

The predicament of PAYPAL is also the reason why other giants, including BlackRock, do not enter the fray: it requires a lot of investment, a strong team, rich experience, and the ability to sustain losses.

Binance is doing well; why don't BlackRock, Goldman Sachs, and PAYPAL create their own stablecoin and use it directly?

HYPE is doing well; why don't BlackRock, Goldman Sachs, PAYPAL, and Amazon create their own stablecoin and use it directly?

5. The larger the stablecoin, the lower the operating costs

Stablecoins are a scalable, networked business model; the larger the scale, the more invincible they become, and the lower the marketing costs.

In the early stages, all interest must be distributed to expand the scale, but once the scale reaches a certain point, no promotion is needed; existence itself becomes the greatest promotion—just like the use of the dollar, once the rules are established, later usage becomes inertia and scenarios.

In international trade settlements, once the rules and habits of using the dollar are formed, why is it so difficult to switch to other currencies? The same understanding applies to CRCL.

Currently, under CIRCLE's strategy of converting U.S. Treasury bonds, its position is somewhat like Lockheed Martin in the military industry, with all resources directed there.

6. CRCL's entry into the S&P 500 is a planned path

CRCL is listed on the New York Stock Exchange, not on NASDAQ. This move is intended to position CRCL not as a tech stock but as a new era of financial infrastructure.

All of CRCL's allies are there, including BlackRock and Goldman Sachs. Based on a market value of around $20 billion and the standard of continuous profitability for several quarters, it is expected to be included in the S&P 500 index by the end of next year, thus gaining nearly $10 billion in passive buying. Currently, with a market value of $16 billion, there is a 100% chance of entering the S&P index, leading to a future influx of over $10 billion in passive funds.

7. The cost price is a clear anchor

The IPO price is around $30, and the opening price is $60, so $60 is the secondary bottom, making it difficult to drop below.

At $30, it is cheaper than a failing bank, but these two cannot be compared. If it drops to $30, I might liquidate my BTC to buy it all—if it drops to $30, I would buy again, and then I would be out of money and go all in.

Risks:

1. Interest rate cuts and growth: If USDC's scale does not grow quickly enough while interest rates are cut sharply, its market value may feel a decrease in income and plummet. However, I believe this mainly depends on growth.

2. The leader being overtaken, such as PYUSD. Although its current scale is insignificant, it has been growing rapidly recently. Will users leverage the PAYPAL platform for explosive growth? From the current situation, I don't think it will lose, but I also believe it can be observed in the long term.

*** Looking back in ten years, perhaps this will be like Duan Yongping buying NetEase. I missed Google's $160; after that, I knew to trust myself, not the price, not the crowd—specifically, to trust my research. The more research I have, the more position I will take.

Related Interests

This article was written on November 28, 2025, starting to buy in at over $60, and the content was modified and improved on December 15.

This article is included in the stablecoin special section at http://DAYU.XYZ.

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