Bitwise's Rasmussen: Circle is mispriced as stablecoins head toward trillions

Bitwise's Rasmussen: Circle is mispriced as stablecoins head toward trillions

Bitwise's Ryan Rasmussen says investors are underestimating Circle as stablecoins expand and the company builds out its payments infrastructure.

The big picture: In an interview on CoinDesk’s Public Keys, Bitwise Head of Research Ryan Rasmussen said investors are underestimating Circle’s opportunity as stablecoins move toward a multi-trillion-dollar market.

Rasmussen expects the stablecoin market to grow from roughly $300 billion to between $3 trillion and $5 trillion. He said Circle is particularly well positioned as U.S. stablecoin regulation takes shape, with its existing market share giving it a head start. “I think we'll look back five years from now and Circle will be not only a stablecoin giant, but a payment giant,” Rasmussen said.

Closer look: Rasmussen’s thesis isn’t just that more stablecoins mean more reserve revenue for Circle — he sees payments infrastructure becoming a major second business.

Circle is building infrastructure designed to facilitate payments in a stablecoin-driven financial system. Rasmussen said that expansion is being “very mispriced by the market,” as investors remain focused on Circle’s reserve-based business. He compared Circle’s potential trajectory to global payments giants including Visa and Mastercard.

The competition: Banks, consumer companies and other incumbents are preparing their own stablecoins, but Rasmussen doesn’t see that as a major threat to Circle.

He argued the overall market could expand fast enough for Circle to grow even as new competitors enter. Rasmussen pointed to new stablecoin initiatives such as OpenUSD as evidence of growing interest from incumbents. Circle’s advantage, he said, is its ability to keep executing as the regulated stablecoin market develops.

What comes next: Circle’s Arc blockchain could test whether the company can successfully expand beyond issuing stablecoins and into the infrastructure that moves them.

Rasmussen described Arc as a layer-1 blockchain designed to facilitate stablecoin payment activity. He said investors should watch whether that infrastructure is adopted and integrated into the traditional financial system. The key question over the next year, Rasmussen said, is how Circle’s economics change as stablecoin adoption grows and its new infrastructure gains traction.

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