Businesses Are Bingeing on Crypto, Dialing Up the Market's Risks
Buying bitcoin is becoming a fad for a growing list of companies that have nothing to do with crypto but believe digital assets can boost their stocks.
The problem, some industry insiders say: This could expose crypto to new risks, amplifying selloffs in moments of turbulence.
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The interest generated is essentially their revenue – and with the stablecoin market skyrocketing from $10 billion to $250 billion in merely five years, Circle manages about 25% of this vast market with a $60 billion valuation of USDC. In this note, we concentrate on a crucial question – as an investor, should you opt for Circle stock or Bitcoin? However, if you're seeking growth with a steadier path compared to a single stock, consider the Trefis High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception. While Circle's dramatic debut has dominated the news, Bitcoin has also had an exciting path. In 2024, its value soared by 120%, surpassing the $100,000 threshold in December. Currently, Bitcoin is trading at approximately $107,000, having even reached a new all-time high of $112,000 in May 2025. This indicates that its price discovery process is far from finished. 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Its business model yields consistent revenue from interest accrued on reserves, and, as a traditional stock, it additionally provides standard shareholder benefits. Bitcoin, conversely, represents pure 'digital gold'— both a store of value and a speculative asset rolled into one. It is decentralized, scarce (with a maximum supply of only 21 million), and functions independently of any corporation or government. The allure of Bitcoin resides in its potential for substantial price increases, rendering it an appealing asset for investors seeking significant returns. Moreover, it acts as a robust hedge against inflation and currency devaluation due to its finite supply and decentralized structure. The primary difference between these investments is that Circle's success is directly linked to a specific company's performance and its capacity to execute. Should unfavorable regulatory developments affect their business model or if competitors succeed in capturing market share, shareholders will certainly experience the repercussions. However, Bitcoin may not suit everyone. While Circle's USDC is designed for stability, Bitcoin thrives on volatility. Despite its reputation for price fluctuations, Bitcoin boasts a 15-year track record of enduring numerous challenges, from regulatory setbacks to market declines. Its value is not tied to the performance of any single entity, arguably making it a more resilient asset over the long term. Currently, both Circle stock and Bitcoin are drawing considerable institutional investment. For example, Japan-based SBI Holdings recently made a $50 million investment in Circle. Meanwhile, Bitcoin spot ETFs collectively manage over $90 billion in assets. 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Consider Trefis High Quality (HQ) Portfolio which, with a selection of 30 stocks, consistently exhibits a history of outperforming the S&P 500 over the past 4 years. Why is that? As a group, HQ Portfolio stocks have delivered superior returns with lower risk in comparison to the benchmark index; avoiding a bumpy ride, as illustrated by HQ Portfolio performance metrics.