USDC Growth Challenges: Rising Costs and Fierce Competition Pressure Circle’s Stablecoin Dominance
Circle Internet Group's shares declined despite strong quarterly results, exposing underlying pressures in its stablecoin operations. USD Coin's circulating supply jumped 90% year-over-year to $61.3 billion, with revenue rising 53% to $658 million. However, Mizuho Securities analysts highlight a growing gap between Circle's aggressive 40% compound annual growth targets and its current 6% quarterly growth rate.
Distribution costs now eat up 64% of reserve pool income—a significant increase from 39% in 2022. This cost surge threatens profitability just as regulatory shifts like the GENIUS Act could open the door to new stablecoin rivals. With Tether's market dominance growing, Circle faces mounting challenges in sustaining its expansion momentum.
