The two market caps of Circle

There's been a ton of excitement about Circle Internet's new stock since it launched trading on June 5, such that its price has gone up wildly.

Yes, but: There hasn't been any more interest in its stablecoin.

The intrigue: Circle's profits mainly come from the size of that stablecoin, USDC.

• USDC's market cap — a measure of the number of stablecoins in circulation — has been flat since Circle's stock started trading.
• Meanwhile, the market cap of its chief competitor, Tether's USDT, is up 2.5%, or just under $4 billion, over the same period.

💭 Our thought bubble: The main basis for the value of Circle (the company) now is the revenue it earns off the reserves, like short-term U.S. Treasuries, backing USDC.

• That is, not the value of those stablecoins. Just the yield it earns off the assets that guarantee their value (which is a lot less than $60 billion).
• Annualizing its first quarter net income gets $260 million. The current valuation is something like 150X income.

Reality check: Either investors are really optimistic about the Circle Payments Network or this chart might lead to some misgivings.