TL;DR
- Modest Bitcoin Holdings: Despite a $5 billion valuation, Circle holds only 73 BTC (~$6.78M), sparking concerns over its commitment to Bitcoin compared to peers like Tether.
- Altcoin-Heavy Strategy: Circle’s portfolio is dominated by altcoins (e.g., Sei, Sui, Optimism, Aptos) with a combined value of $18.7M, underscoring a preference for emerging tokens over traditional crypto assets.
- Valuation Under Scrutiny: Analysts question Circle’s high valuation amid heavy expenses and reliance on interest rates, fueling speculation about potential acquisitions by major players like Coinbase or Ripple.
Circle, the issuer of the USDC stablecoin, has come under fire after its recent IPO filing revealed surprisingly low Bitcoin holdings. Despite its $5 billion valuation, the company holds just 73 BTC, worth approximately $6.78 million, raising concerns about its commitment to the leading cryptocurrency.
Industry insiders have pointed out that Circle’s Bitcoin reserves pale in comparison to competitors like Tether, which holds 92,000 BTC, valued at $7.64 billion. This stark contrast has fueled speculation about Circle’s long-term strategy and whether it truly sees Bitcoin as a cornerstone asset.
Honor companies & people that keep their profit in crypto, it's better for the price than if they sell for fiat. e.g. Circle the company of USDC fame held $7M of Bitcoin and $6M of Ethereum Dec 31, 2024. That's a very small crypto holding. Some companies & people doing well are…
— Richard Heart (@RichardHeartWin) April 2, 2025
Heavy Investment in Altcoins
Rather than focusing on Bitcoin and Ethereum, Circle has allocated a significant portion of its portfolio to alternative cryptocurrencies. The company’s holdings include 6.25 million Sei tokens, 2.3 million Sui tokens, and 867,000 Optimism tokens, alongside 217,000 Aptos tokens and other digital assets.
The combined fair value of these altcoins stands at $18.7 million, far exceeding its Bitcoin and Ethereum allocations. While this strategy may reflect optimism about emerging blockchain ecosystems, critics argue that it signals a lack of confidence in Bitcoin’s long-term strength.
Industry Experts Question Circle’s Valuation
Beyond its crypto holdings, Circle’s financial disclosures have raised eyebrows among analysts. Omar Kanji, a partner at Dragonfly, has questioned how the company justifies its $5 billion valuation, citing $250 million in annual compensation costs and $140 million in general expenses.
Kanji also highlighted Circle’s reliance on interest rates, which have likely peaked, putting pressure on its revenue model. Some experts speculate that the IPO could be a liquidity-driven move rather than a sign of financial stability.
Could Coinbase or Ripple Acquire Circle?
Adding to the uncertainty, VanEck’s Wyatt Lonergan noted that Coinbase takes nearly $900 million of Circle’s $1 billion USDC-related revenue, raising concerns about its dependency on external partnerships.
Lonergan suggested that if Circle’s IPO struggles, Coinbase could acquire the company or even Ripple might enter the bidding war, valuing Circle between $15 billion and $20 billion.
As Circle moves forward with its IPO, investors and industry observers will be watching closely to see whether its financial strategy aligns with its ambitious valuation—or if a major acquisition reshapes the stablecoin landscape.
