When stablecoin issuer Circle recorded a $482 million loss in the second quarter, it sent the firm’s stock tumbling 15% in a single day.

Despite the volatility, the USDC issuer still trades at a whopping $36 billion valuation, up 115% from its public offering price.

So, what’s propping up Circle?

Insatiable demand for stablecoins among Wall Street investors, according to Colin Butler, head of global financing at crypto treasury firm Mega Matrix.

“Investors have an idea that this is a sector for exponential growth in a world that’s starved for growth outside of artificial intelligence,” Butler told DL News.

“If you’re underwriting exponential growth in stablecoins, you only have one way to play it as a pure play, and that’s Circle.”

‘Financial plumbing’

The soaring investor interest comes after US Treasury Secretary Scott Bessent predicted in June that US dollar stablecoins could grow to a $2 trillion market in the coming years.

Bessent’s comments, coupled with the passage of landmark stablecoin legislation in the US, sparked a stablecoin rush.

Startups either issuing stablecoins or building the infrastructure for fiat-based cryptocurrencies to operate on have raised $537 million in 2025, according to data from DefiLlama. That’s a five-fold uptick from the grand total injected into the sector in 2024.

On the stock market, investors and businesses now seek to capitalise on the trend — regardless of financial statements.

“Circle today is valued less on current spread income and more as the regulated gateway for digital dollars,” Maja Vukinovic, CEO of FG Nexus, an Ethereum treasury company, told DL News.

The institutional demand for stablecoin exposure, coupled with the fact that Circle is able to hold such a high valuation relative to its finances, presents a huge opportunity for other issuers looking to tap into public markets.

“Investors are not just valuing [Circle] as a blockchain firm, but as a key piece of tomorrow’s financial plumbing,” Qin En, managing partner at Onigiri, a crypto venture firm, told DL News.

Soaking up demand

With no signs that Tether, the stablecoin market’s largest issuer, intends to go public, smaller firms are seeking to capitalise on investor demand.

On September 15, Gemini, the crypto exchange and issuer of the GUSD stablecoin, went public. The sale was oversubscribed, and the firm’s shares initially traded 32% above their IPO price of $28.

With clear demand, other issuers could follow.

Who’s next?

Paxos, the New York-based fintech behind several stablecoins, is the most natural next candidate, Vukinovic said.

“It has a US trust charter, a proven compliance record, and it powers PayPal’s stablecoin,” he said.

It’s not just issuers that look to get in on the action.

Crypto treasury companies like Mega Matrix are looking to draw in investors who can only invest in publicly-traded firms by giving them exposure to DeFi stablecoin issuers, like Ethena, the third biggest issuer of dollar-pegged tokens after Tether and Circle.

The increased competition could even impact Circle’s valuation as investors have more options to choose from.

“That is healthy for the ecosystem,” En said. “Circle still has to earn its right to win in an increasingly crowded race.”