Bitwise’s Rasmussen: Circle is mispriced as stablecoins head toward trillions
Bitwise research chief Ryan Rasmussen believes investors are seriously undervaluing Circle as the stablecoin market expands. His case is blunt: crypto payment infrastructure is becoming a business in its own right. My take: that part of the thesis is easier to overlook than the growth forecast. If Rasmussen is correct, the companies moving digital dollars may eventually matter as much as those issuing them.
Rasmussen expects the stablecoin market to grow from about $300 billion today to between $3 trillion and $5 trillion. Speaking on CoinDesk’s Public Keys, he argued that Circle could capture a sizable share. That is a 10-fold to nearly 17-fold leap. Huge. Plenty can go wrong over five years. Still, Rasmussen expects stablecoins to move beyond crypto trading and become common payment tools. Why Circle? Because USDC already holds a solid market share while U.S. rules are getting clearer. “I think we’ll look back five years from now and Circle will be not only a stablecoin giant, but a payment giant,” he said.
Rasmussen believes payment infrastructure could become Circle’s second big business, a possibility he says the market has largely ignored. Investors usually focus on the income Circle earns from reserves backing USDC. Fair enough: reserves generate its revenue today. But that is only half the picture. Circle is also building systems that let people and institutions transfer and spend USDC, rather than simply hold it. If those systems catch on, Rasmussen thinks Circle could resemble Visa or Mastercard more than a standard stablecoin issuer. I’ll be honest: that comparison is aggressive. Yet processing payments in a market worth between $3 trillion and $5 trillion would force investors to reconsider Circle’s value. It could also draw more institutions toward stablecoins—and toward the crypto protocols connected to them.
Competition is growing as banks and consumer businesses consider issuing stablecoins, including projects such as OpenUSD. The usual reading is that more issuers weaken Circle. Rasmussen sees it differently. He expects the market to expand fast enough for Circle to grow even while banks, consumer businesses, and projects such as OpenUSD fight for share. More launches also signal genuine demand for digital dollars, though many individual coins may disappear. Circle’s record of releasing working products gives it an advantage as regulations settle, he says. Rules matter here. Institutions tend to avoid legal uncertainty, so firmer rules could make USDC easier for them to use. Circle still has to deliver. If it does, more capital could enter markets such as USDC/USDT and USDC/ETH.
Investors should pay attention to Arc, Circle’s layer-1 blockchain for stablecoin payments. Arc gives Circle more control over the systems moving its coins. More importantly, it offers the cleanest test of Rasmussen’s argument. Do banks and other traditional finance firms adopt the network or connect their systems to it? That is the question. The next year should provide harder evidence about Circle’s costs and revenue as stablecoin use increases. Arc also reaches beyond Circle. If it connects crypto networks with conventional finance in a practical way, other payment projects may copy the model. DeFi applications could find business on the network. The effect on assets such as ETH, however, will depend on where transactions occur—and who collects the fees.
What this means
Rasmussen expects stablecoins to become ordinary payment infrastructure instead of remaining tools mainly used for crypto trading, arbitrage, and yield farming. That would be a substantial change. For now, though, it remains a prediction. Retail and institutional users already rely on stablecoins to move money into and out of crypto; Rasmussen is betting they will next use them throughout the wider economy. My read: reliability may matter more than novelty at that stage. Regulated services that work consistently should have an advantage. Circle could gain ground against USDT and place USDC on more major exchanges. Most stablecoin pitches stop there. They shouldn’t. Will people actually use these networks to pay for things? That is the harder test.
During the next 12 to 18 months, investors should judge Arc by actual adoption and the revenue it earns beyond Circle’s reserve business. A bank partnership or major-payment-processor announcement sounds impressive. A press release proves very little. Counter to the usual hype cycle, the less glamorous figures will matter more: transaction volume and active users, followed by fees and repeat revenue. Stablecoin laws in the U.S. and elsewhere will shape the result as well. Firmer rules may bring more institutional money to Circle and to the stablecoin market as a whole. Rasmussen expects greater liquidity to help BTC and ETH trading, too. I would keep one caveat front and center: that benefit appears only if stablecoin growth creates lasting demand for crypto, rather than activity that stays inside payment networks.