Is the market misjudging the value of Circle and Coinbase?
Circle has become completely incomprehensible. With a total issuance of only 60 billion USDC, its market capitalization is now 54.1 billion USD, close to its issuance amount. At this point, there's not much to say except wanting to slap myself; it doesn't matter to me if it goes to 250.
Circle's profits come almost entirely from interest income on government bonds, with profits mostly flowing to Coinbase, contributing as much as 910 million USD in revenue for them in 2024 alone.
The high price of Circle actually highlights how cheap Coinbase is:
1. Most of Circle's profits are taken by Coinbase.
2. $COIN has officially been included in the S&P index, which is very significant.
3. Coinbase has a market cap of 78.1 billion, only 1.4 times that of Circle, yet its profitability is 10 times that of Circle.
Buying COIN and selling Circle might be a good strategy now.
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