Infrastructure Plays in Crypto: Understanding the CRCL Formula and How Circle Stacks Up Against Trading Giants

The crypto infrastructure landscape has evolved into two distinct but interconnected models: the stablecoin-and-payments ecosystem represented by Circle Internet Group (CRCL), and the trading-centric exchange model dominated by Coinbase Global Inc. (COIN). Both companies derive value from blockchain adoption, yet their exposure to market dynamics differs fundamentally. This deep dive explores why the CRCL formula—anchored on reserve-backed stablecoins, regulatory compliance, and platform-driven revenue diversification—is reshaping how investors evaluate infrastructure plays.

The Diverging Paths: Trade Volume vs. Economic Infrastructure

Coinbase has built its empire on volatility. The company extracts value from trading fees, custody services, and institutional derivatives, making it a direct play on crypto market cycles. When Bitcoin rises or trading intensity peaks, Coinbase thrives. When markets cool, so does its profitability. Q3 2025 results underscored this reality: operating expenses climbed as headcount expanded and acquisition-related costs mounted, yet revenue growth remained tethered to market swings.

Circle, by contrast, operates differently. USD Coin (USDC) serves as the foundation—a regulated, fully reserved stablecoin now circulating at approximately 74.98 billion tokens (representing a 2.39% market share as of late January 2026). The CRCL formula’s power lies in its revenue mix: instead of betting on price action, Circle monetizes the infrastructure layer itself through subscription fees, transaction revenues, and reserve-based interest income. This fundamentally more stable cash flow model reduces earnings volatility.

Operational Performance: Growth With Margin Expansion

Circle’s September 2025 financials revealed the strength of this model. USDC circulation had exceeded $73.7 billion, doubling year-over-year and claiming nearly 40% of all stablecoin transactions. Revenue grew 66%, adjusted EBITDA surged 78%, and margins expanded to 57%—a stark contrast to Coinbase’s margin pressure.

The drivers are instructive: the Circle Payments Network (CPN) and Cross-Chain Transfer Protocol (CCTP) expanded adoption across 28 blockchains, deepening network effects. When institutional clients adopt these infrastructure layers, they become sticky customers generating recurring revenue—the opposite of trading-fee dependency.

Coinbase’s acquisition spree—notably Deribit and Echo—attempted to build similar stickiness in derivatives. Perpetual futures exceeded $840 billion in Q3 2025 volumes, and the addition of options trading promised higher margins. Yet this expansion came at a cost: amortization of acquired intangibles pressured near-term profitability, and integration risks remained unresolved.

The Strategic Bet: Arc as Long-Term Option Value

Circle is pursuing an ambitious Layer-1 blockchain called Arc, positioned as an “economic OS for the Internet.” Over 100 major institutions joined the public testnet, and a native Arc token is under exploration to support governance and incentives. This represents genuine optionality—if Arc gains adoption, it could unlock new revenue streams and competitive moats.

However, it also introduces execution risk and regulatory uncertainty. Building and scaling a blockchain requires sustained capital deployment and ecosystem development. The upside is real, but so are the pitfalls.

Valuation and Near-Term Performance

Price performance diverged sharply in December 2025 and early January 2026. CRCL rose 10.6% while COIN gained just 0.9%, reflecting market recognition of the structural advantages. Bitcoin ETF outflows and trading volatility particularly pressured Coinbase’s performance.

From a valuation standpoint, both stocks trade above historical averages. However, CRCL trades at 6.02X forward 12-month price-to-sales, compared with COIN’s 8.19X—signaling lower valuation risk for Circle. This premium reflects COIN’s exposure to cyclical trading revenues, while CRCL’s platform-driven model commands a more stable multiple.

Earnings Outlook and Risk Assessment

The 2026 outlook reveals critical differences:

• CRCL: Revenue expected to rise 18.6%; earnings consensus of $0.90 per share represents a sharp turnaround from a $0.87 loss in the prior year
• COIN: Earnings forecast of $5.82 per share reflects a 26.7% year-over-year decline, signaling earnings volatility remains a concern

For Coinbase, regulatory headwinds continue—jurisdictional uncertainty, crypto classification risks, and competition from decentralized exchanges all threaten margins. Stablecoin competition is also intensifying; while USDC remains dominant, competitors are chipping away at market share through alternative strategies.

Circle faces different but manageable risks: dependence on interest-rate regimes for reserve income, rising distribution costs, and the execution gamble on Arc. These are material but appear priced into current valuations.

The Infrastructure Winner

The CRCL formula—stable cash flows, recurring revenue, regulatory alignment, and platform monetization—represents a more sustainable value creation model than trading-fee dependency. As institutional adoption of blockchain infrastructure accelerates, the economic advantage tilts toward companies monetizing the plumbing rather than the speculation on top of it.

Circle currently trades at a Zacks Rank of #3 (Hold), reflecting its stability profile, while Coinbase holds a #4 (Sell) rating, signaling caution around earnings volatility and near-term headwinds. For investors seeking exposure to genuine crypto infrastructure—not trading cycles—CRCL offers superior visibility and lower downside risk heading into 2026.