Circle’s IPO Reveals Coinbase Earns More From USDC Despite Explosive Growth

Cryptocurrency firm Circle has revealed surprising insights in its recent IPO filing—Coinbase earns more from USD Coin (USDC) than Circle itself. Circle’s largest expense in 2024 was a staggering $908 million paid to Coinbase for USDC distribution. Despite USDC’s massive growth, this payment significantly impacts Circle’s profitability.

USDC, launched by Circle and Coinbase in 2018, is now the second-largest stablecoin with a $60 billion market cap. Its circulating supply surged over 78% in 2024, and lifetime on-chain transaction volume has hit $25 trillion. Since inception, more than $1 trillion in USDC has been minted and redeemed across 19 blockchains supporting native issuance.

Although Circle posted an impressive $221.6 million profit in 2024, this came after a $758 million loss in 2022 during a severe crypto bear market. The company’s revenue more than doubled over two years—from $772 million in 2022 to nearly $1.7 billion in 2024. Most of this revenue comes from interest on reserves backing USDC.

However, Circle warns that its profits could take a $414 million hit if the U.S. Federal Reserve cuts interest rates by 200 basis points. This highlights the company’s heavy reliance on macroeconomic conditions for profitability.

Meanwhile, Coinbase reported $2.3 billion in Q4 2024 revenue, mostly from transaction fees, further underscoring the exchange’s stronger revenue streams compared to Circle.

Circle’s IPO arrives amid increasing competition in the stablecoin space. Tech giants like PayPal and blockchain firms like Ripple are launching their own regulated stablecoins, intensifying the race for dominance in the digital dollar market.

With USDC’s continued adoption and Circle’s public debut, all eyes are on how the firm will navigate rising competition and shifting economic tides.