Bitwise calls Circle selloff “overdone,” sees path to $75B valuation by 2030
Bitwise Asset Management is pushing back against the sharp re-pricing of Circle’s stock, arguing that the market has misread both the impact of upcoming legislation and the long-term outlook for stablecoins.
Matt Hougan, Bitwise’s chief investment officer, believes Circle could reasonably command a $75 billion valuation by 2030, despite its shares tumbling around 22% on Monday after a tougher draft of the CLARITY Act triggered a wave of selling.
Market reaction to CLARITY Act seen as “excessive”
The latest draft of the CLARITY Act has raised the possibility of prohibiting stablecoin issuers from paying yield directly to token holders. That headline risk was enough to spark an aggressive selloff in Circle’s stock (ticker: CRCL), as traders priced in a hit to profitability and competitiveness.
Hougan, however, characterizes the move as an overreaction. In his view, the proposed restrictions do not fundamentally alter the trajectory of the stablecoin industry or Circle’s strategic position within it. He argues that investors have zoomed in on interest income and yield products, while underestimating the strength of USDC as core payments infrastructure.
Stablecoins growing faster than earlier forecasts
To support his bullish stance, Hougan points to fresh research from Citigroup. The bank recently upgraded its base-case estimate for total stablecoin circulation in 2030 from $1.6 trillion to $1.9 trillion, and outlined a bullish scenario in which supply could swell to $4 trillion.
Citigroup’s revision reflects accelerating adoption across several fronts:
– Integration into major payment networks
– Growing use by corporations for treasury and settlement
– Deeper incorporation into financial institutions’ rails and products
– Continued expansion in crypto-native ecosystems and decentralized finance
Hougan highlights that this growth story does not depend on yield. In his assessment, stablecoins are winning because they are faster, cheaper, and more programmable than traditional payment methods, not because they pay interest. Yield may be a short-term marketing edge, but the structural demand driver is utility.
Yield isn’t the core engine of demand
The central fear behind the selloff is that if yield-sharing with stablecoin holders is restricted, demand for dollar-pegged tokens will evaporate and issuers’ profitability will collapse. Hougan challenges both assumptions.
First, he argues that the majority of stablecoin usage already centers on payments, trading, settlement, and remittances, where reliability and liquidity matter more than earning a few extra basis points. Second, even if yield products become more constrained in one jurisdiction, issuers can still monetize reserves through interest on government securities and other safe instruments, as long as they comply with regulations.
In this framework, yield is a nice-to-have, but not the backbone of the business.
Why CLARITY could actually help Circle
Some analysts go further, suggesting that the CLARITY Act might strengthen Circle’s relative position rather than weaken it.
If aggressive yield programs are reined in, it could remove a key differentiator for higher-risk competitors who have used generous incentives to attract liquidity. A regime that curbs yield while emphasizing regulatory compliance, transparency, and safe collateral might favor an issuer like Circle, whose brand is built around regulatory engagement and conservative reserve management.
By “leveling the playing field,” legislation could compress the gap between compliant and non-compliant actors, pushing more institutional capital toward regulated, large-scale providers such as Circle.
William Blair: USDC as a “base layer” for payments
Equity analysts at investment bank William Blair share a broadly constructive view. In a recent report, they argued that the market is underappreciating USDC’s role as a foundational payments layer rather than just another trading chip in crypto markets.
Their thesis rests on several pillars:
– Circle’s deep compliance infrastructure and track record with regulators
– Strong banking relationships enabling smooth fiat on- and off-ramps
– Extensive cross-chain integrations that make USDC usable across multiple blockchains
– Early traction in cross-border business-to-business payments
Together, these elements form what William Blair describes as a durable moat. As more payment flows move on-chain, especially in wholesale and B2B contexts, stable, compliant rails become increasingly valuable.
Centralization worries flare after USDC freezes
The selloff was also exacerbated by a separate controversy: Circle’s decision to freeze USDC balances in 16 business hot wallets late Monday. The move temporarily disrupted operations at several exchanges and platforms, aggravating already-frayed market sentiment toward the stock.
Freezing wallets is not unprecedented for Circle, but each high-profile incident revives a familiar debate: how much control should a centralized issuer have over an ostensibly “crypto-native” asset? Critics argue that such interventions underscore the centralized design of USDC, while supporters contend that these controls are necessary for compliance and mainstream adoption.
Regardless of stance, the timing of the freezes-coinciding with negative legislative headlines-magnified investor anxiety.
Scale and traction: USDC by the numbers
Despite the volatility in Circle’s share price, the underlying metrics point to substantial scale:
– More than $75 billion USDC in circulation
– Over $6 trillion in adjusted transaction volume processed to date
– 2024 revenue of $1.68 billion, driven predominantly by interest on reserves invested in short-term government bonds
Citigroup’s revised projection for $1.9 trillion in total stablecoin issuance by 2030 implies an annualized growth rate of roughly 20% through the end of the decade. That expansion is expected to be fueled by:
– Crypto-native trading, DeFi protocols, and on-chain derivatives
– E-commerce and digital marketplaces settling in dollar tokens
– Substitution of overseas physical or offshore dollar holdings with tokenized dollars
In William Blair’s analysis, USDC’s network effects are already visible. They note that USDC’s 30-day adjusted transaction volume recently approached $6 trillion, compared with about $1.1 trillion for Tether’s USDT over the same period. From their perspective, this gap indicates that USDC is becoming the preferred settlement asset in many high-value flows, despite USDT’s larger overall circulation.
Bitwise’s $75B valuation thesis
Against this backdrop, Bitwise’s $75 billion valuation target for Circle by 2030 implies substantial upside from the company’s pre-crash levels. The core of Bitwise’s argument is that Circle sits at the center of a fast-growing infrastructure layer: tokenized dollars that can move globally at near-instant speeds.
Key elements of the thesis include:
– Structural growth of stablecoins as a category, independent of yield
– Circle’s strong brand with regulators and institutions
– USDC’s growing share in high-value, on-chain payment flows
– Potential expansion into new product lines built on top of USDC rails
If stablecoins mature into a multi-trillion-dollar asset class, Bitwise believes Circle is among the best-positioned issuers to capture that value, provided it successfully navigates regulatory tightening and competitive pressure.
How regulation is reshaping the stablecoin race
The CLARITY Act is part of a broader wave of global regulation aimed at bringing stablecoins under clearer oversight. Rather than viewing this purely as a threat, some market participants see it as the final step in legitimizing the sector.
For Circle, regulated status can be a differentiator. Many institutional investors and large enterprises are unwilling to rely on instruments that fall into legal gray zones or depend on opaque collateral. If the regulatory bar rises, smaller or less transparent issuers may struggle to keep pace, consolidating market share around a few dominant, compliant players.
At the same time, tighter rules can cap certain revenue streams-like aggressive yield-sharing-and increase compliance costs. The winners are likely to be those with enough scale and capital to absorb these burdens while building new services on top of their token rails.
Strategic implications for Circle’s business model
The looming shift in yield economics forces Circle and its rivals to think more like payments and infrastructure companies than quasi-money-market funds.
Several strategic directions are already visible:
– Expanding enterprise solutions for cross-border payroll, supplier payments, and treasury management
– Partnering with banks and fintechs to embed USDC in consumer and merchant-facing products
– Building developer tools and APIs so software companies can integrate USDC into applications without wrestling with blockchain complexity
– Exploring tokenized versions of other assets, such as short-term securities, that complement USDC’s role as a transactional currency
If these lines of business scale, they could diversify Circle’s revenue away from a heavy dependence on interest income, making its earnings profile more resilient in a post-CLARITY environment.
What the selloff signals for investors
The steep drop in Circle’s stock after the CLARITY headlines reflects a broader pattern in crypto-related equities: regulatory news often triggers outsized price moves, both upward and downward, as markets grapple with uncertainty.
Bitwise’s stance suggests that sophisticated asset managers may increasingly view such episodes as potential entry points, rather than as signs that a particular theme is broken long term. In their framing, the recent decline looks more like a sentiment-driven capitulation than a reset of fundamentals.
Still, the path to Bitwise’s $75 billion target is far from guaranteed. It hinges on multiple variables: how the final version of CLARITY is drafted and enforced, whether Circle continues to outpace rivals in usage and partnerships, and how macroeconomic conditions affect demand for dollar-backed assets.
The bigger picture: stablecoins as financial plumbing
Stepping back, the debate around Circle’s valuation is really a debate about the role of stablecoins in the future financial system.
If stablecoins remain niche tools for traders, current valuations might look aggressive. But if they evolve into the primary rails for global dollar payments, remittances, and settlement-embedded in everything from e-commerce checkouts to corporate treasury systems-the companies that control those rails could become systemically important financial infrastructure providers.
Bitwise, William Blair, and Citigroup are effectively betting on the latter scenario. Their research and valuations reflect a belief that stablecoins, and USDC in particular, are moving from speculative side-show to core plumbing. The recent stock selloff, in that view, is a loud but temporary distraction from a quieter, more durable trend: the tokenization of money itself.