ANALYSIS: Does the Circle IPO value Tether at $316B?

Stablecoin issuer Circle will finalize pricing for its IPO shares one hour after the 4pm close of regular trading on the New York Stock Exchange (NYSE) today. That price will provide a formal benchmark with which to value the world’s largest stablecoin issuer, Tether.

Already boosted 10% due to investor interest over the weekend and reportedly 25 times oversubscribed as of this morning, shares of Circle will trade under ticker symbol CRCL.

Based on early morning estimates, shares will price at least $27-28 apiece at a valuation in excess of $7.2 billion.

That estimated range could increase substantially at today’s 5pm pricing.

Early access to the IPO is skewing toward Main Street investors, with retail-focused brokerages Robinhood and Webull offering IPO Access.

IPO Access allows traders to request shares of a new public company at the IPO price before it lists to the general public on the NYSE.

IPO Access allocates brokerages’ limited number of IPO shares based on a random lottery. For brokerage customers who don’t receive their full allocation, brokerages also accept regular bids up to 20% higher than IPO pricing that will be filled once shares list on the NYSE.

Because of these bids plus a favorable macro environment for crypto, including a 10% year-to-date rally in bitcoin (BTC), shares of CRCL could be trading in the $30s or higher by tomorrow morning.

The best valuation tool for Tether in history

Circle issues the world’s second-largest stablecoin, USDC. Its IPO tomorrow will value the company and provide a precise valuation tool for Tether, issuer of the world’s largest stablecoin, USDT.

For over a decade, companies issuing stablecoins have remained private, obscured from public market valuation as they quietly operate profitable enterprises.

Circle’s IPO creates a new method for peer analysis of its larger competitor.

The most simplistic comparison of valuation is now available: issuer market cap to stablecoin market cap.

At $7.2 billion, Circle’s corporate market capitalization is 11.7% of the $61.4 billion market cap of its flagship USDC.

Applying the same formula to Tether — 11.7% of USDT’s $153.7 billion market cap — would impute an $18 billion valuation for Tether.

However, this formulaic, apples-to-apples comparison of a stablecoin’s market cap to the company’s size is probably not the best comparison of the two companies.

Ultimately, what usually matters to investors is cash flow. The classic analysis for investment is the net present value of future cash flows, after all.

Comparing the profitability of Circle and Tether

Unlike Circle, Tether claims to be one of the most profitable companies per employee in the world. Tether has claimed multiple millions of dollars in profit per employee, including $45 million of profit per employee within just three months of 2024.

Circle, on the other hand, claims far less profitability. In 2024, it reported a net profit of about $156 million after distribution, transaction, salary, and compensation costs.

The company employs over 1,000 people, meaning it doesn’t even generate $1 million in net profit per employee.

As Protos has previously noted, Tether’s financial disclosures are not SEC filings and do not adhere to US Financial Accounting Standards Board definitions.

Unlike Circle, which reports net income as a controlled term per US regulation, Tether isn’t a US company and uses unique terminology.

Therefore, it’s impossible to know the exact assets, encumbrances, and calculations included within Tether’s reported profitability. For this reason, it’s impossible to perform an apples-to-apples comparison of Tether’s profitability to Circle’s profitability.

Nevertheless, and given that caveat, someone could calculate Tether’s value based on its larger profitability.

44 times more ‘profit’

In 2024, Circle reported net profit of about $156 million after distribution, transaction, salary, and compensation costs.

In 2024, Tether reported $13 billion in profit. About $7 billion of that was interest income comparable to Circle’s operations, while about $5 billion came from unrealized gains in BTC and gold.

These aren’t particularly comparable to Circle, which doesn’t have such investments backing USDC.

Therefore, comparing Circle’s $156 million of interest income to Tether’s $7 billion of interest income could mean that Tether could be 44 times larger than Circle.

If Circle is worth more than $7.2 billion, that would mean Tether could be worth 44 times more: $316 billion.

In addition to the above caveats, also note that this $316 billion figure is more than twice the value of Tether’s $153 billion USDT stablecoin itself. At $7.2 billion, Circle is only worth 11.7% of its $61.4 billion stablecoin — nowhere close to twice the value of its stablecoin as this calculation would imply for Tether.

Why is Tether 213% bigger than Circle but 8,000% more profitable?

Of course, there are many more considerations for using Circle’s valuation to decipher Tether’s valuation. In addition to jurisdictional differences plus considerations like Tether’s lack of a formal audit, the actual assets backing USDC and USDT are wildly different and should also factor into a reasonable analysis.

Protos previously visualized the assets backing USDC and USDT based on their latest available reports as of early May 2025. Investors looking to value Tether based on Circle should also consider these asset mix differences.

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