Home » Circle Stock: Building a crypto payment infrastructure with USDC

Circle Stock: Building a crypto payment infrastructure with USDC

by Investoradar

Stable coins are blockchain-based cryptocurrencies backed by the same US dollar amount. I believe stable-coin is a much more realistic approach for the general public to use as a “currency” as it is a lot more stable compared to most cryptocurrencies such as bitcoin. The high volatility nature of bitcoin makes it a lot less reliable to transact as its value fluctuates literally every second. Stable-coin are blockchain-based cryptocurrency backed by the same US dollar amount

The largest stable coin currently on the market is USDT (Tether) with USDC being second. USDT’s market cap is around $63 billion and USDC’s market cap is around $26 billion. Both stable-coin uses US Dollars to back their value one-to-one which means you can always exchange one USDT or UDSC back to one US dollar. Both stable coins can be bought easily on crypto exchanges such as Binance (if you use this exclusive link to sign up on Binance now you can get a 10% rebate on all crypto trading fees). Even though USDC’s market cap is lower than USDT, I prefer USDC due to its transparency and reliability. USDT’s account is audited by Freeh Sporkin & Sullivan LLP which is a law firm instead of an auditing firm, also they never disclose how often their account is being audited. On the other hand, USDC’s account is being audited monthly by Grant Thornton, one of the world’s top five consulting and accounting auditing firms.

Circle (CND), the company behind USDC announced that it is going public via a SPAC deal with Concord Acquisition Corp and the deal will value Circle at $4.5 billion. Circle is one of my favorite crypto companies because it provides the infrastructure that enables businesses of all sizes to leverage the power of digital currencies and public blockchains for payments, commerce, and financial applications worldwide using USDC, its own stable coin. Its API service allows companies to store, pay, and receive USDC frictionlessly and immediately with nearly no fees.

A lot of companies still don’t accept cryptocurrency as a payment method due to its complexity and lack of reliability. The rise of USDC and Circle’s API service opens the door for companies to finally accept USDC. This is particularly useful in the NFT space which has been booming lately. It allows creators and buyers to buy and sell NFT efficiently. This can also be used in the Metaverse to allow different people to transact without having to deal with the volatility like most cryptocurrencies. The company also announced that they are going to introduce more features such as fraud management, Circle yield service, and DeFi API to further enhance the companies capability and reliability.

The company is growing quickly and the growth rate is not slowing down anytime soon. The company forecast revenue to grow at a CAGR (compound annual growth rate) of 177% from $115 million this year to $886 million in 2023. Circle accounts are estimated to grow from around 2700 to 30000 in 2023. USDT in circulation and transaction volume is also poised to grow from $35 billion to $194 billion and $3 billion to $17 billion in 2023. This also presents a great opportunity for investors that are interested in investing in the stable coin space, the company’s 2023 P/S (price to sales) ratio is only 5.8 which is substantially lower than other high-growth tech companies. I believe the company is going to become a vital player in the crypto space (especially the commerce and NFT are) as the importance and usage of stable-coin keep growing.

Check out another article Teladoc Stock: Telehealth is the future of healthcare

Get notified when new articles are being posted!!

Investoradar

This website uses cookies to improve your experience. We'll assume you're ok with this. Okay Read More