Author: Michael Mach Source: X, @1912212eth
A single quarter's settlement of $11.9 trillion: USDC's size is approaching half of the US GDP.
On February 25th, Circle announced its total revenue and reserve income for fiscal year 2025 at $2.7 billion, a 64% increase. After the announcement, CRCL surged from $61 to $83, marking its largest single-day gain since October 2nd of last year. The market voted with real money, acknowledging the significance of this financial report.

It's worth noting that after reaching a high of $298 following its IPO last June, CRCL's stock price steadily declined, even falling to a historic low of $49.90 on February 5th. This strong rebound is, to some extent, a correction of the market's previously excessive pessimism.
... USDC's circulating supply reached $75.3 billion by the end of 2025, a year-on-year increase of 72%. Let's look at the most crucial metric: USDC's circulating supply reached $75.3 billion by the end of the year, a year-on-year increase of 72%. What does this figure mean? Against the backdrop of a slowdown in the overall stablecoin market, Circle's market share actually expanded by 4.26 percentage points, reaching 28%. The logic behind this shift is simple—Tether's compliance controversies gave USDC an opportunity, while Circle's long-term investment in regulatory compliance is translating into market share. On-chain USDC trading volume reached $11.9 trillion in Q4, a staggering 247% year-over-year increase. This figure is almost half of the US GDP. While there is significant arbitrage and wash trading involved in on-chain transactions, the 247% growth rate still demonstrates the rapid increase in USDC's penetration as a settlement infrastructure. On the revenue side, total revenue in Q4 reached $770 million, a 77% year-over-year increase, exceeding the average analyst expectation of $748 million from FactSet. Reserve income reached $733 million, a 69% year-over-year increase, contributing the vast majority of revenue. Here's an explanation of the reserve income logic: Circle uses user-deposited USD to purchase low-risk assets such as short-term US Treasury bonds, earning interest rate differentials. The reserve return rate in Q4 was 3.8%, a 68 basis point decrease year-over-year, but the doubling of USDC circulation completely offset the impact of declining interest rates. What truly excited the market was the explosive growth in profits. Adjusted EBITDA reached $167 million, a staggering 412% year-over-year increase, far exceeding analysts' expectations of $130 million. The RLDC profit margin (revenue minus distribution costs) jumped from 30% to 40%, a full 10 percentage points increase. Economies of scale are beginning to emerge; the marginal cost of issuing one more USDC is rapidly decreasing. The financial report reveals several noteworthy business signals. First, there's the progress of the Arc public testnet. Over 100 institutions participated, achieving nearly 100% uptime, 0.5-second transaction finality, and an average of 2.3 million transactions per day. These figures may seem like technical parameters, but they reflect the real demand for on-chain settlement from traditional financial infrastructure. Visa announced that US issuers and acquirers can use USDC to settle with Visa, signifying USDC's penetration into the underlying layers of the traditional payment system. It's also worth mentioning that Circle mentioned in its report plans to launch the Arc mainnet within 2026. Secondly, there's the expansion of the Circle Payment Network (CPN). 55 financial institutions have registered, with an annualized transaction volume of $5.7 billion. This figure is still small, but the direction is crucial—Circle is transforming from a simple stablecoin issuer into a payment network operator; the potential of this business model is far greater than simply collecting interest spreads. Regarding the Euro stablecoin EURC, its circulating supply reached €310 million, a year-on-year increase of 284%. Demand for Euro stablecoins is being activated following the implementation of the MiCA regulatory framework. USYC (tokenized US Treasury bonds) assets reached $1.5 billion, a quarter-on-quarter increase of 111%, indicating increased institutional acceptance of on-chain yield products. The financial report wasn't all good news. For the full year, Circle recorded a net loss of $69.5 million, primarily due to $424 million in equity incentive expenses triggered by its IPO. Excluding these non-cash expenses, the full-year adjusted EBITDA was $582 million, a year-on-year increase of 104%. The reserve return rate has fallen from 4.1% to 3.8%, and this trend is likely to continue. According to the latest data from Polymarket, the probability of the Federal Reserve not cutting interest rates was 97% in March, 86% in April, and 46% in June. If the Federal Reserve chooses to cut rates again in June, Circle's interest rate spread income will inevitably be under pressure. The management's guidance for 2026 also reflects this—the revenue margin guidance, excluding distribution costs, is 38%-40%, essentially maintaining the status quo, indicating that the room for profit margin expansion may already be limited.