Coinbase Exchange may be the unexpected winner of Circle Internet Group’s recent IPO.
While Circle’s stock debut caught the market’s eye, the deeper story lies in how Coinbase stands to profit from the stablecoin issuer’s crypto stock success.
A key partnership between the two companies could see Coinbase pulling in more revenue from USDC than even Circle.
Coinbase Exchange Gains from Circle’s USDC Revenue
It is worth noting that the most essential factor behind Coinbase Exchange’s edge is its revenue-sharing deal with Circle.
In his latest post on X, Michael Nadeau disclosed that Coinbase keeps 100% of the revenue generated when USDC is minted on its platform.
On top of that, it earns 50% of the reserve income from USDC held outside Coinbase. This means that Coinbase benefits directly as the total supply of USDC grows.
With over $60 billion in USDC currently circulating, this agreement has become a serious revenue driver.
Circle’s IPO filing supports this, confirming the exact structure of the reserve income split.
On June 6, Nadeau pointed out that despite the hype around Circle, it still trades at just a third of Coinbase stock or market value.
With big names like Uber planning to get involved in USDC payments, the potential for expansion is strong.
However, due to the revenue model’s design, Coinbase, not Circle, could earn the lion’s share of future profits.
Circle Stock’s Wild First Week and All-Time High Surge
Circle’s crypto stock performance during its first week on the public market was remarkable.
The stock launched at $82.84 and ended the trading day on June 6 at $107.70, a 29.40% gain in just 24 hours.
In after-hours trading, it climbed even further to $115.20, with a daily increase of 6.96%. The stock hit an all-time high of $123.51 during the week.
Notably, the high trading volume—nearly 60 million shares exchanged—shows strong investor interest.
The crypto stock’s appeal is boosted by compliance with MiCA regulations in Europe and momentum from the GENIUS Act in the United States.
Meanwhile, major investors like BlackRock and Ark Invest are already on board. BlackRock holds a 10% stake, while Ark Invest has committed $150 million. Coinbase also holds a 3.5% stake in the firm.
However, some analysts, including Wyatt Lonergan, believe that the current valuation may not be sustainable and could face a correction as hype will stabilize.
Can Circle Crypto Stock Be Sustained?
While Circle’s market cap has already exceeded $10 billion, there are questions about whether it can sustain or build on this level.
The stablecoin firm is working on expanding its Circle Payments Network and has begun efforts around USDC tokenization.
These moves could unlock further value as stablecoin demand grows.
However, doubts remain. Some market watchers on X, such as Phil Gjørup, have raised concerns about Circle’s low net income.
A declining interest income could also weigh on performance in a rising interest rate environment. Meanwhile, competition from Ripple and PayPal adds more pressure.
In contrast, Coinbase Exchange collects a dependable revenue share through USDC activity, benefiting the former’s investors more.
Following its debut on the NYSE, Coinbase CEO Brian Armstrong stated that USDC is the most trusted stablecoin.
Even if Circle’s valuation dips or growth slows, Coinbase could maintain or increase its earnings due to its position in the revenue structure.
