$Circle Internet Corp.(CRCL)$ CRCL is down with the broader market, but the underlying business has shifted in a pretty meaningful way. A 25 bp rate hike adds roughly $185M of annualized gross reserve income at the current USDC base. Another 25 bp hike would put the combined tailwind around $370M annually.
I suspect it won't be long before the narrative moves from "higher rates hurt markets" to what higher for longer rates actually mean for Circle's bottom line. And unlike the last rate cycle, Circle now has Arc starting to build a new transaction and infrastructure driven revenue engine alongside reserve income.
Higher reserve revenue now. New Arc economics developing going forward.
The business is evolving even while the stock trades with the market.
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