Original Title: Coinbase Will Have to Acquire Circle – The Only Question Is Price
Translated by: zhouzhou, BlockBeats
Background
I have worked in the crypto industry for many years - first at CoinFund (an early-stage fund), and later joined Coinbase to help expand its venture capital strategy.
All content in this article is based on public data: Circle's S-1 prospectus (April 2025) and Coinbase's public financial reports. No insider information - just an analysis that anyone could replicate, though most people won't do so.
USDC Supply Structure Breakdown
Total USDC = USDC held by Coinbase + USDC held by Circle + All other parts
According to the S-1 definition, platform USDC refers to the proportion of stablecoins held by custodial products or wallet management services. This means:
- Coinbase = Coinbase Prime / Exchange
- Circle = Circle Mint
- Others = USDC stored on platforms like Uniswap, Morpho, Phantom
Coinbase's share in total USDC supply is rapidly growing - reaching about 23% in the first quarter of 2025. Circle's share remains stable.
This is reasonable - because Coinbase has greater influence in consumer, developer, and institutional markets.
USDC Revenue Attribution
Both Circle and Coinbase can obtain 100% of USDC reserve income on their platforms. For USDC "outside the platform" (the "other parts"), both parties split 50/50.
But there's a key point: Circle receives disproportionate revenue from USDC outside the platform. Although Coinbase's USDC is 4 times that of Circle, its revenue advantage is only about 1.3 times.
[The rest of the translation follows the same professional and accurate approach, maintaining the original meaning while translating to English.]- Circle is a natural acquisition target for Coinbase, and Coinbase is well aware of this;
- Circle wants the public market to price itself (with a target of $5 billion);
- Coinbase wants to see what valuation the market gives Circle;
- Coinbase knows full well:
- It must own the entire USDC stack;
- Integration could make USDC account for 15%~30% of its revenue;
- Based on revenue value, the "reasonable valuation" of USDC should be between $10~20 billion.
Circle also knows these things - and realizes that as long as USDC continues to grow, Coinbase will ultimately choose to directly acquire it to resolve the ongoing business, product, and governance friction in their cooperation.
Final Perspective
Coinbase should acquire Circle, and is very likely to do so.
Currently, their cooperation can continue, but in the long term, the conflicts at the platform, product, and governance levels are too significant to ignore. The market will provide a price, but both parties already know each other's value in their hearts.
