Today, $CRCL dropped below $200, which I wanted to discuss. Yesterday, I chatted with @YeruiZhang Rui about CRCL, and I really like Rui's method of valuing CRCL, which differs from many of our friends. Rui's view is that CRCL's market value increase can be referenced by the decline of VIAS and MASTERCARD.
I compared the trends of $V and $MA, which are highly consistent, as their businesses are also highly aligned. When CRCL emerged, both were impacted and declined, mainly because the market expected CRCL might occupy their payment market space.
Of course, this is just an expectation, and the market prefers expectations. However, if viewed this way, the market will gradually react. For the C-end, CRCL still has a long way to go. In developed countries, breaking into the current payment market is extremely difficult, and changing user habits is challenging. Moreover, although CRCL's profitability seems good, its payment channel fees are higher.
That's not all. If comprehensive interest rate cuts begin in 2026, CRCL's revenue will inevitably be hit, and maintaining the current 30% would be good. The single income structure is a major issue for compliant stablecoins, which might also be why Tether doesn't want to be compliant in the US, because compliant stablecoins cannot act as "banks".
In other words, they cannot engage in high-yield projects like collateralized lending, and can only earn income through US bonds. If US bond rates return to 0.25% or 0.5% in 2028, CRCL's profitability would look poor. Not to mention CRCL still needs to pay channel fees to #Binance and #Coinbase, leaving uncertain funds to explore new markets.
Of course, financing is not a problem, as going public is primarily for fundraising. But can these funds help CRCL break into the payment market and take a share? Or might they be restricted by VISA and MASTER? That remains uncertain.
When developing imagination, benchmarking PayPal is fine, but PayPal has its own stablecoin, PAUSD, and is also a beneficiary of this stablecoin legislation. Moreover, in payment and cross-border domains, PayPal's business far exceeds what CRCL could achieve.
So from a trend perspective, if Rui's view holds, any potential VISA and MASTER positive gains might actually cause CRCL to decline.
