Circle’s ambition to become a bullion-level public cryptocurrency company fails to impress Borderless CEO Kevin Lehtiniitty, who brands himself as a wrinkled old guard of stablecoins. Stationed on March 31, 2025, for its S-1 IPO filing, Circle allows investors to see its financial statement, in which Kevin Lehtiniitty reveals negative profit trends. High expenses and market saturation indicate challenges ahead. The billions generated by Tether outside U.S. borders create serious hurdles for Circle’s journey toward its public listing because of its heavy expenses on compliance requirements. Here’s the breakdown.
Major disclosure from Circle shows diminishing profits alongside substantially increasing costs
The S-1 filing revealed that Circle’s net profit decreased substantially to $155.7 million in 2024 from $267.6 million in 2023, a sharp contrast to Tether’s $13 billion annual cash flow profit, with half from U.S. Treasury yields. Revenue hit $1.7 billion, but the filing’s real kicker? Circle paid Coinbase $908 million as its primary distribution partner to maintain USDC operations. The company’s revenue distribution for maintaining its market position reaches 53%.
Tether’s “crypto-native” workforce pays no financial expenses for excessive personnel costs, regulatory costs, or the costs associated with licensing that Circle must maintain. According to Lehtiniitty’s interview with The Block, “Tether operates without significant costs from compliance measures because its success depends on different strategies.”
Circle’s $908 million expenses on distribution fail to displace the $144 billion Tether market cap, whereas USDC currently stands at $60 billion, according to CoinGecko’s March 26 data.
Investors on the X platform are commenting on Circle’s expensive quarterly expenses, which paid Coinbase $908 million per their IPO filing. “Tether’s laughing,” one user jabbed. USDC exists primarily for regulatory reasons because the profits do not reach the level of the invested amounts, according to one Block interviewee.
According to Lehtiniitty, there is a commodity competition between stablecoins
Lehtiniitty, who started TrueUSD ten years ago, believes that Circle faces shaky conditions at No. 2. According to him, stablecoins follow basic technology standards, which allow any company to launch its own products. The stablecoin market remains highly competitive, and Circle does not possess one-of-a-kind advantages. He demonstrates PayPal’s potential to control the market by embedding PYUSD into its platform alongside World Liberty, which Trump’s distribution network could support.
- The Coinbase partnership originating from the CENTRE Consortium fails to establish Circle as a market leader in the category. The executive claimed that PayPal would dominate through the integrated use of its platform.
- Circle’s regulatory strategy for fighting its competitors involves excessive financial burdens linked to deep governmental involvement, which is costly.
He stated that Circle dedicates excessive funds to creating regulations that align with its business interests. The story functions as a warning sign for new stablecoin companies entering the market.
Circle seems to be heading toward an IPO but its route to doing so will pass through a regulatory opening coupled with rising market demand.
Circle submitted its filing during an active period when stablecoin legal regulations are developing in the United States. Trump and his team continue to push for the GENIUS Act to reach presidential signing by summer before Congress passes it into effect at both the House and Senate levels. Lehtiniitty rarely displays optimism when he states that these bills serve consumers well while encouraging innovation through measured approaches. The system appeals to him because states deal with smaller companies through money transmitter licenses. Still, the Office of the Comptroller of the Currency supervises big stablecoins like USDC to provide consistent regulations nationwide.
- According to him, startups benefit from MTLs because they allow new entrants to experiment quickly and inexpensively.
- Using OCC rules will establish clear nationwide regulations that Circle needs to expand its business operations across states.
Circle’s chances of conducting an IPO increase following this broken ice as it benefits from the president’s friendly approach. The company issued a 2022 SPAC bet, but it failed following the turbulent market conditions of that year. The company has received backing from JPMorgan Chase and Citigroup, with $5 billion in equity fundraise plans to lead to a public listing by the third or fourth quarter of 2023.
Tether’s Shadow Looms Large
According to Lehtiniitty, Tether’s $13 billion profit exceeds Circle’s $155.7 million profit because of different strategic approaches. He says, “Tether operates with a minimal headcount along with minimal compliance costs because its business model is permissionless.” Circle’s $908 million in funds locked on Coinbase represent an inefficient use of capital, as USDT processes US$100 billion in Treasury bill purchases directly from Cantor Fitzgerald.
The sentiment expressed on X stated that Tether functions as a highly lucrative operation, but Circle remains trapped by regulatory burdens. One participant argued that USDC demonstrates better transparency than USDT, which remains opaque, although an initial public offering might flip it.
Circle’s S-1 filing acknowledges that yield-bearing tokenized funds pose a potential threat to USDC’s user base. For now, Tether is dodging that heat.
The bull section of X chat applauded when Circle’s IPO led to DeFi success for regulated stablecoins. The exchange representative “Coinbase received $908M” while shooting their response. They’re bleeding out.” Lehtiniitty’s verdict? The dominance of distribution in the market reveals that Circle is paying too much to maintain its position as second place in the sphere.
