One of the biggest names in the crypto space, Circle announced that it will be terminating the existing business combination with Concord Acquisition Corp and will now enter into an agreement with new terms.
This change of agreements is the reason behind Circle’s increased valuation.
Circle Squares Up
Best known for issuing the second biggest stablecoin in the world and the fifth-biggest cryptocurrency in the world, the USD Coin (USDC), Circle has revamped its terms with Concord today.
Back in 2021, Circle had entered into a definitive business combination agreement with Concord, a publicly-traded SPAC (special purpose acquisition company).
This agreement’s expiration date is set on April 3 2022 and because due to unspecified reasons it could not be completed, the companies will simply be replacing the new deal with the older business agreement.
Once successfully executed, this agreement would allow both the companies to be listed on NYSE under a holding company tradable under the ticker “CRCL”
On the prospect of soon becoming a public company, the Co-founder and CEO of Circle Jeremy Allaire stated:
“Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem. Making this journey with Concord under our new agreement is a strategic accelerator.”
In conclusion, the improvement in Circle’s financial outlook and competitive position owing to the growth of USDC has resulted in Circle’s overall value rising by 100% from the previous $4.5 billion to $9 billion.
The platform has been created to serve as an industry-wide solution to comply with the mandates of the Travel Rule while still keeping users’ personal details secure.
The Growth of USDC
USDC currently has a market cap of $52.6 billion. This time last year the same market capitalization was sitting at $7.29 billion.
Put simply this growth translates to a 621.53% year-on-year growth and if USDC continues to rise at this rate by this date in 2023 the market cap would be sitting at $379.52 billion.
Although the market dip of February 10 did result in a slowdown in USDC issuance, the same would improve once the market goes back into either posting a green candle or simply consolidating at current levels without dropping further.
USDC circulation slowed down slightly post the February 10 market dip | source: Messari
Holding a Mass Media Degree has enabled me to better understand the nitty-gritty of being a journalist and writing about cryptocurrencies’ news and price movements, effects of market developments, and the butterfly effect of individual assets nurtured me into a better investor as well.