What's Better – Circle Stock Or Bitcoin?
PARIS, FRANCE - FEBRUARY 27: In this photo illustration, a visual representation of the digital ... More Cryptocurrency, Bitcoin sits on US mobile payment company Circle application on February 27, 2018 in Paris, France. (Photo Illustration)
The cryptocurrency landscape recently experienced a significant shift with Circle's remarkable launch last week. The stock now trades at $118, representing a staggering 4x increase from its IPO price of $31 in just a few days, positioning it as one of the most successful IPOs since 2020. Circle is the organization behind USDC, the world's second-largest stablecoin. USDC is intended to retain its value at $1, making it ideal for transactions and trading without experiencing extreme price fluctuations. Circle's business model is surprisingly simple. They accept dollars, issue USDC tokens, and invest those reserves in secure assets such as U.S. Treasury bills. 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. A broad consensus among analysts from large institutions suggests that Bitcoin may attain significantly higher levels in the coming years, fueled by growing institutional adoption and the approval of Bitcoin ETFs.
Circle's 4x increase from its $31 IPO price to $118 illustrates the volatility typical of the crypto market, calling into question the assumption that it is the less risky alternative compared to Bitcoin. Nevertheless, the potential for further upside is likely to be more limited from this point onward compared to Bitcoin.
Investing in Circle stock can be seen as a wager on the underlying infrastructure of digital finance. You're putting your money into a company that benefits from the growing demand for stable digital currencies. Investing in Circle stock offers exposure to the expanding stablecoin sector while maintaining regulatory compliance and transparency. 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. This significant institutional support is a pivotal development, as it not only validates both assets but also lays a strong foundation for their prospective growth.
You might consider investing in Circle stock if you're seeking exposure to the cryptocurrency world without the extreme price fluctuations, believe in the bright future of stablecoins, and prefer the familiar aspects of the traditional stock market, particularly given Circle's transparent revenue stream. On the flip side, Bitcoin may be a better fit if you can tolerate substantial volatility, are persuaded by its growth narrative, desire a genuinely decentralized asset, and are aiming for maximum upside potential.
Understand that there always exists a significant risk associated with investing in a single stock, or merely a handful of stocks, let alone in crypto. 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.
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You said that Bitcoin could become the world's reserve currency because of the US debt situation, which is ballooning. How realistic is that? Well, it really is unclear at this point, but one thing that is clear is that democracies around the world are having trouble getting deficit spending under control. And you know, that can only, if you study history, right, the changing world order, different empires, like who had the reserve currency different moments in time, once you decouple currency from hard commodities, the inevitable story is they get overprinted and extend, right? And so I think right now, I, to be clear, you know, I want the US to remain the reserve currency status. I think a strong America is very important for the world, and I think cryptocurrency is helping the dollar enormously with things like USDC and stable coins. But if the debt situation doesn't get fixed, I do think that eventually Bitcoin will have to become the reserve currency, for better or worse. It's not going to be the Chinese RMB because I think they have their own debt problems, and it's not a coincidence that as we're seeing all-time highs in US debt, we're seeing all-time highs in Bitcoin. We had a great chart in there too in your presentation, but what is the, what's the tipping point for that to happen? When debt hits a certain level, suddenly we have to worry about the world reserve currency being the US dollar? Yeah, I mean there's not usually, it's like one of these things like the frog is slowly cooked and you know, I think if you look at other countries in the past, it was maybe around 150% or 200% debt to GDP, things started to get a little wonky. And so we're going to have to see what happens. I hope that the Congress, which is doing an amazing job by the way and on passing legislation in a bipartisan way for crypto, and this administration, the Trump administration, has been an incredible tailwind for crypto. They've done an incredible job. 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I think that our goal is to power more and more of people's financial lives with Coinbase products and we started in trading, now we're moving into all kinds of financial services like payments and borrowing and lending. And eventually, I think crypto and Coinbase can be a replacement for people's bank account, right? I think that more and more of their financial life will happen on chain with Coinbase, and it'll being bring new benefits and services to customers. Like why shouldn't you earn four and a half percent on your checking account, right? Or why can't you send money instantly anywhere in the world for free? Or, you know, why can't you do, if you if you live in Turkey or Nigeria, why can't you trade US equities 24/7 with perpetual futures, right? It's logical, right? Yeah, I mean there, there's, sometimes there's artificial barriers and middlemen taking fees and like that's what crypto is all about, it's about updating the financial system, bringing freedom and individual sovereignty to people all over the world. I was reading some research on crypto from the JP Morgan team and they said the retail investor is looking for the next catalyst in Bitcoin. It made sense because it's been a pretty big year, we've had the Bitcoin reserve, we have companies like yours putting out new products. But is the next catalyst for retail investors, that rising debt that you're talking about. As this continue to go, continues to go up, why wouldn't you want to own Bitcoin? Yeah, I do think the average person in America, even if they don't quite understand, you know, interest rates and the yield curve, they understand that their money is worth less than it was five years ago, and they feel that something is inherently untrustworthy or broken about that. 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