Using the "winner model" to study Circle: Which historical winners should CRCL investors look to for answers?
Core Viewpoint
Circle is a company that is difficult to explain using a single comparable company.Author: @lufeieth
Introduction
Circle is a company that is difficult to explain with a single comparable company.
If viewed as a stablecoin issuer, it is closest to Tether; if seen as a global payment network, its goals are similar to Visa and Mastercard; if considered as a settlement infrastructure between financial institutions, it shares similarities with SWIFT, DTCC, and CLS; if regarded as a developer platform, it is learning from Stripe, AWS, and Twilio; given that USDC operates on an open blockchain, Circle must also address the long-standing question faced by Red Hat: how does a company continue to capture commercial value when the underlying network remains open?
Therefore, when studying Circle, the most effective question is not "Which company is Circle most like?" but rather:
What winning patterns correspond to each layer of Circle's business? Does it possess the critical success factors that these historical winners truly had?
This is where the Winner Pattern Study can play a role.
I. What is Winner Pattern Study
In 2022, Xu Xin, founder of Today Capital, reflected on an important lesson from her investment career during an alumni interview at Nanjing University: when studying a single company, investors can easily fall in love with that company and ultimately fall into the trap of "seeing the trees but not the forest."
To address this issue, she summarized a three-part research methodology:
Study the rules of winners to understand what great companies look like.
Deeply understand consumers and users.
Research the major companies in the industry one by one to build a complete industry map.
The first part is the Winner Pattern Study.
The study of winners that Xu Xin refers to is not simply reading a few business stories. Using the retail industry as an example, the research team systematically read the biographies, historical materials, and annual reports of companies like Amazon, Walmart, Costco, 7 Eleven, Aldi, and Walgreens. The research also included founder speeches, quarterly earnings calls, and strategic changes, focusing on understanding how winners are formed step by step. (
Sina Finance
)
Thus, the Winner Pattern Study can be summarized as a research chain:
Historical winner samples → Key success factors → Causal mechanisms → Current company comparisons → Verifiable metrics
Its purpose is to establish a causal map of the industry, avoiding judgments based solely on company narratives, short-term data, or superficial analogies.
II. Six Core Points of Winner Pattern Study
1. Study the historical process of winners
Studying a mature company statically often reveals brand, scale, profit margins, and network effects, but misses the sequence in which these results were produced.
What truly needs to be studied is:
What problem did it initially solve?
Who was the first core user group?
How did it achieve a cold start in the early days?
What flywheel emerged after scaling?
When did the company gain pricing power?
How did the revenue structure expand from a single business to multi-layered charges?
Why were competitors unable to replicate it?
Winning patterns exist in the development path, not in the final financial statements.
Visa today has a global network, brand, standards, and risk control capabilities, but these capabilities have undergone a long evolution through authorization, clearing, settlement, cross-border connections, and value-added services. VisaNet established electronic authorization and clearing systems in the 1970s, and then continuously expanded into multi-currency processing, risk control, e-commerce, and value-added services.
2. Study the underlying mechanisms, avoiding staying at the industry label
Just because two companies are in payments does not mean they have the same business model.
Visa's core asset is the network connecting banks, merchants, acquirers, and consumers; Stripe's core capability is reducing the development difficulty for businesses to access financial infrastructure; SWIFT controls financial messaging and communication standards; Tether's advantages mainly come from liquidity, trading pair coverage, and global dollar distribution.
Therefore, when studying Winner Patterns, one should distill the causal mechanisms:
What drives growth?
What is the basic unit of network effects?
Who controls user relationships?
Who controls standards and interfaces?
Which layer has the right to charge?
Where will value flow among ecosystem participants?
3. Study both winners and "almost successful" companies simultaneously
Only studying winners can lead to survivor bias.
When researching Visa, one should also study Diners Club, Discover, and regional payment networks; when studying AWS, one should also look at early cloud computing competitors; when studying USDT, one should also consider BUSD, DAI, PYUSD, and other stablecoins that have not reached the same scale.
A more rigorous approach is to configure three types of samples for each Winner Pattern:
Final winners.
Long-term second place.
Companies with similar conditions but ultimately failed.
The differences among the three are often more valuable than the commonalities among winners.
4. Distinguish between industry victory and company victory
An industry can grow rapidly, yet some companies within it may still fail to generate excess returns.
The growth of stablecoins does not automatically mean that Circle's profits will grow in tandem. The growth value of USDC may be shared among exchanges, wallets, public chains, banks, payment service providers, and distribution channels.
Therefore, investors must separately answer two questions:
Can the USDC network succeed?
Can Circle's shareholders obtain a sufficiently high share of network value?
Widespread adoption of infrastructure and the ability of infrastructure owners to gain pricing power are two independent verification processes.
5. Transform patterns into falsifiable metrics
Winner Patterns cannot remain at the narrative level.
Each analogy must be transformed into data that can be continuously tracked, such as:
Number and activity of network participants
User retention rate and transaction frequency
Number of developers and applications in production environments
Ratio of direct customers to channel customers
Revenue per transaction
Non-interest income ratio
Channel revenue share ratio
Customer concentration
Product cross-usage rate
When these metrics cannot improve over the long term, the relevant winning patterns should be downgraded.
6. Separate business model research from valuation
Even if Circle possesses certain early characteristics of historical winners, the stock price may have already priced in a large amount of success expectations.
Winner Patterns answer:
What kind of company could Circle grow into?
Valuation analysis answers:
How much success probability is already priced into the current market value?
Only by combining the two can a complete investment judgment be formed.
III. How to Apply Winner Pattern Study in Practice
When studying each historical winner, seven questions can be uniformly answered.
1. Initial entry point
What strong pain point did the company initially solve?
Why are users willing to switch?
Is this entry point sufficient to support early scale expansion?
2. Cold start method
Where did the first batch of suppliers and demand come from?
Did the company complete the cold start through subsidies, partnerships, regulatory support, or existing channels?
3. Growth flywheel
Will new users enhance the value of existing users?
Do more transactions lead to better liquidity, lower costs, higher security, or broader coverage?
4. Control points
What key resources does the company control?
Common control points include:
Standards
Protocols
Brands
User entry points
Data
Liquidity
Compliance qualifications
Developer interfaces
Clearing and settlement systems
5. Charging points
At which layer does the company ultimately charge?
Is the basis for charging transaction volume, asset size, API call volume, subscriptions, value-added services, or reserve asset returns?
6. Value leakage
Which partners have strong bargaining power?
How much value will channels, suppliers, regulators, and infrastructure providers take away?
7. Conditions for failure
How might technological substitution, regulatory changes, competition, channel backlash, or product homogenization disrupt the winning pattern?
Research on Circle should also follow these seven questions, rather than first determining conclusions like "the next Visa" and then seeking supporting evidence.
IV. Before Studying Circle, Define Which Competitions It Is Participating In
Circle currently positions itself as a full-stack platform for internet financial systems. Its products cover multiple layers including USDC, EURC, Circle Payments Network, CCTP, Gateway, wallets, developer tools, and Arc. Circle aims to provide digital assets, cross-chain liquidity, payment networks, developer infrastructure, and settlement coordination capabilities simultaneously.
As of the end of Q1 2026, the circulation of USDC reached $77 billion; the activity volume disclosed by Circle for CPN corresponds to an annualized trading scale of $8.3 billion over the past 30 days. CPN Managed Payments allows financial institutions to provide stablecoin payments without directly managing digital assets.
This indicates that Circle is attempting to complete three strategic leaps:
First leap: From stablecoin product to default digital dollar asset
Users no longer view USDC as one of many stablecoins but as the default dollar asset in transactions, payments, collateral, and settlements.
Second leap: From digital asset to financial network standard
Financial institutions, trading platforms, payment service providers, and developers form stable interfaces, liquidity, and business processes around USDC.
Third leap: From network standard to chargeable control layer
Circle continuously charges through payment networks, cross-chain services, wallets, compliance, liquidity, custody, developer tools, and management services.
The long-term investment return of CRCL ultimately depends on whether Circle can complete the third leap.
V. Seven Types of Winner Patterns CRCL Investors Should Focus On
First Type: USDT's Global Digital Dollar Distribution Model
Why study it
USDT is the most direct historical sample when researching stablecoin demand, liquidity, and distribution networks.
Tether has long emphasized two core scenarios:
24-hour dollar liquidity in the cryptocurrency trading market.
Demand for dollar storage and cross-border transfers among users in emerging markets.
Tether has publicly stated that its strategic focus has long been on emerging markets and regions with insufficient coverage of traditional dollar financial infrastructure.
What to study
How USDT became the default pricing asset for exchanges
How trading pairs and liquidity form a self-reinforcing cycle
How low-cost networks like Tron drive distribution
Why emerging market users assign different weights to compliance transparency and convenience
What role exchanges, market makers, and wallets played in the cold start
Why it is difficult for later entrants to replace once network leadership is established
Core question for Circle
USDC primarily relies on regulatory compliance, institutional partnerships, and on-chain finance for growth, while USDT mainly relies on global distribution, trading liquidity, and dollar availability for its advantages.
CRCL investors need to assess:
Can USDC's compliance advantage translate into a sufficiently strong liquidity advantage and usage habits?
Key metrics to track:
USDC's share in transactions, payments, collateral, and RWA
Growth of USDC balances outside of Coinbase
Actual usage in non-U.S. regions
Liquidity depth across different public chains
Growth of USDC direct holders and active addresses
Institutional settlement volume versus retail usage
Second Type: Visa and Mastercard's Open Payment Network Model
Why study it
Visa is one of the most important Winner Patterns when Circle builds its global payment and settlement network.
Visa does not assume most consumer credit risk and does not directly manage the majority of merchant relationships. Banks, acquirers, and payment service providers are responsible for distribution, while Visa controls network standards, transaction processing, rules, brand, and risk control infrastructure.
VisaNet gradually expanded from electronic authorization and clearing systems to cross-border processing, mobile payments, risk control, and value-added information services, forming multi-layered charging capabilities.
What to study
How Visa completed the cold start on both the bank and merchant sides
Why financial institutions are willing to join a shared network
How network rules reduce trust costs among participants
How Visa expanded from basic processing revenue to value-added services
How standards, brand, risk control, and global coverage create entry barriers
How Visa allocates economic benefits with banks that have customer relationships
Core question for Circle
Can CPN form a similar network of financial institutions?
Key metrics to track:
Number of active Originating Financial Institutions and Beneficiary Financial Institutions
Actual number of payment corridors opened
Repeat transaction rate of individual institutions
CPN transaction volume and revenue growth
Whether CPN has formed a clear charging mechanism
Whether banks and payment companies expand usage scenarios after accessing CPN
Whether CPN can extend from payment services to risk control, foreign exchange, liquidity, and compliance services
For CRCL, the growth of CPN's scale is just the first step. Unit transaction revenue, customer retention, and adoption of value-added services will determine whether it can gradually present Visa-like economic characteristics.
Third Type: SWIFT, DTCC, and CLS's Financial Market Public Infrastructure Model
Why study it
Circle's development path towards the institutional market has significant similarities with traditional financial market infrastructure.
SWIFT connects global financial institutions through a unified financial messaging standard. It is currently a cooperative organization owned by its members, connecting over 11,000 banks, financial institutions, and enterprises.
DTCC has become the core post-trade infrastructure of the U.S. capital markets through automation, centralization, and standardization, processing large-scale securities transactions daily.
The moats of these institutions mainly come from:
Unified standards
Institutional connection density
Compliance credibility
System reliability
Process embedding
High switching costs
What to study
How the financial industry forms common standards
Why neutral governance is beneficial for institutional participation
How infrastructure embeds into banks' internal processes
How reliability, compliance, and governance translate into moats
How regulatory recognition enhances entry barriers
How industry utilities maintain low fees and long-term stable income
Core question for Circle
Can Circle become a trusted digital cash coordination layer for banks and capital market institutions?
Key metrics to track:
Direct access from globally systemically important banks
Degree of USDC's entry into custody, clearing, trading, and collateral systems
Whether banks incorporate USDC into daily product processes
Stability, redemption capability, and compliance record of Circle's system
Whether CPN and CCTP gradually form factual standards
Whether institutions are willing to rely on a commercial company for critical settlement infrastructure
A key difference between Circle and SWIFT, DTCC is that SWIFT and DTCC have strong industry utility and member governance attributes, while Circle is a commercial company pursuing shareholder returns.
This means Circle must establish a balance between neutrality, openness, and shareholder value capture.
Fourth Type: Stripe, AWS, and Twilio's Developer Infrastructure Model
Why study it
Whether Circle can form a high-profit platform business in the future largely depends on whether developers are willing to use it as their default financial infrastructure.
Stripe encapsulates complex payment and financial processes into modules that developers can directly call through unified APIs, SDKs, testing environments, documentation, and development tools. Stripe's current APIs cover payments, subscriptions, payouts, and financial workflows.
AWS started with foundational components like S3 and EC2, continuously adding databases, networking, security, computing, and development tools, gradually expanding from single-point services to a complete cloud platform. S3 was launched in 2006, and since then, AWS has continuously added numerous foundational components and adjacent products.
What to study
What is the biggest friction when developers access a new infrastructure
How documentation, SDKs, sandboxes, and debugging tools reduce access costs
How a single API expands into a product matrix
How usage-based charging naturally expands with customer growth
How cross-selling occurs between products
How the developer ecosystem enhances customer retention and switching costs
Core question for Circle
Can Circle's CCTP, Gateway, wallets, contract tools, and Arc become the default financial components that developers call upon?
Key metrics to track:
Number of developers and applications in production environments
API call volume
Developer retention
Number of Circle products used by individual customers
Conversion rate from testing environment to production environment
Developer revenue and other non-reserve income
Degree of third-party applications' reliance on Circle's infrastructure
The success of Arc should also be evaluated within this framework.
The criteria for measuring Arc should not be limited to on-chain TVL or token price but should also observe whether it reduces the overall friction for developers using USDC, CPN, Gateway, and other Circle products.
Fifth Type: Red Hat's Open Infrastructure Commercialization Model
Why study it
USDC operates on an open blockchain, allowing users to hold and transfer USDC without continuously paying fees to Circle.
This means Circle cannot fully rely on a closed platform for charging. It needs to establish a service layer that enterprises are willing to pay for around open assets.
Red Hat's success provides an important reference. The underlying open-source software can be freely obtained, and Red Hat earns subscription revenue through tested and certified software, stability, security updates, lifecycle management, technical support, and enterprise services.
What to study
Which parts of open technology are easy to commoditize
What enterprises are willing to pay for
How security, stability, service level agreements, and compliance form charging capabilities
How community ecosystems and commercial products coexist
How companies establish control points without compromising openness
Core question for Circle
Can Circle establish a high-value enterprise service layer around USDC?
Potential charging points include:
Enterprise-grade wallets
Managed payments
Compliance and identity verification
Liquidity management
Cross-chain coordination
Foreign exchange services
APIs and development tools
Service level agreements
Enterprise-level technical support
Tokenized asset management
Key metrics to track:
Growth of non-reserve income
Enterprise customer payment rate
Revenue from managed payment business
Gross margin of software and services
Proportion of customers using multiple Circle products
Whether Circle can establish unique services on top of the open network
Sixth Type: Value Distribution Model Between Network Owners and Distribution Channels
Why study it
This is the Winner Pattern that CRCL investors are most likely to overlook, yet it directly impacts profit margins.
The growth of USDC requires participation from exchanges, wallets, public chains, banks, and fintech companies for distribution. These partners can expand network scale but may also gain considerable bargaining power.
Circle paid approximately $1.4 billion in distribution costs to Coinbase in 2025. The company also stated that as reserve income grows and new distributors and authorized participants are added, future distribution costs may still rise.
This indicates that there is an important distribution mechanism between the scale of USDC and Circle's shareholder profits.
What to study
How Visa distributes network value among issuing banks and acquirers
How platforms gradually reduce reliance on a single channel
How network owners establish direct customer relationships
Whether multi-channel competition can reduce channel bargaining power
Which control points must remain in the hands of network owners
Whether channel contributions match channel revenue shares
Core question for Circle
Key metrics to track:
Proportion of USDC balances related to Coinbase
Proportion of Coinbase distribution costs to reserve income
Costs of other distribution channels
Number of direct institutional customers for Circle
Proportion of USDC directly minted and redeemed
Channel diversification among banks, payment companies, and enterprise customers
Whether distribution cost rates decline with scale
Whether Circle has the ability to renegotiate commercial terms
An increase in USDC share, but a simultaneous rise in distribution cost rates, may lead to a stronger network with limited improvement in shareholder economics.
Therefore, distribution cost rates should be placed on par with USDC circulation, market share, and on-chain transaction volume.
Seventh Type: Transformation Model Between Reserve Income and Platform Revenue
Circle currently remains highly reliant on reserve income, thus interest rates, USDC scale, and distribution costs jointly determine short-term profitability.
Circle's 2025 annual report shows that other income has begun to come from integrated services, blockchain rewards, redemption fees, tokenized fund management fees, etc., but current reserve income and distribution costs remain core variables of the business model.
CRCL investors need to study companies that generate income based on customer funds, asset scale, or financial balances, focusing on understanding:
Profit elasticity during rising interest rate phases
Profit pressure during falling interest rate phases
Relationship between scale growth and net yield
Impact of channel revenue sharing on net profit margins
How to transition from asset balance income to transaction fees, software fees, and service fees
How to maintain profit growth in a normalized interest rate environment
Key metrics to track:
Average circulation of USDC
Yield on reserve assets
Proportion of distribution costs to reserve income
Profit under standardized interest rates
Proportion of other income
Revenue contributions from CPN, Gateway, wallets, Arc, and tokenized funds
Gross margin of non-reserve businesses
Whether CRCL's valuation can continue to rise largely depends on when the market begins to redefine Circle from an interest-sensitive stablecoin issuer to a financial infrastructure platform with multi-layered charging capabilities.
VI. Winner Pattern Research Priorities for CRCL Investors
If ranked by importance, I recommend prioritizing the following cases.
First priority: Visa
Addressing Circle's two most important questions:
How are network effects formed?
How is network value converted into chargeable income for shareholders?
Focus on studying VisaNet, bank governance, charging structures, value-added services, and global expansion.
Second priority: Tether
Addressing whether USDC can become the default digital dollar.
Focus on studying liquidity, trading pairs, emerging markets, chain selection, exchange distribution, and user habits.
Third priority: Stripe
Addressing how Circle can transform complex financial infrastructure into developer products.
Focus on studying APIs, SDKs, documentation, product expansion, and developer distribution.
Fourth priority: SWIFT
Addressing issues of financial institution networks, unified standards, governance, and neutrality.
Focus on studying bank participation motivations, communication standards, compliance, and global connectivity.
Fifth priority: Red Hat
Addressing how open networks can achieve commercial value capture.
Focus on studying enterprise services, subscriptions, security, certification, and technical support.
Sixth priority: DTCC and CLS
Addressing issues of institutional-level clearing, settlement, collateral, and systemic infrastructure.
Seventh priority: AWS
Addressing whether Circle can gradually expand from a core product to a full-stack platform.
VII. Final Research Framework: Can Circle Complete Three Leaps
After completing the above Winner Pattern Study, CRCL investors ultimately need to answer three questions.
First, can USDC become the default digital dollar asset?
Main reference: Tether.
Key verification points are liquidity, usage habits, distribution networks, and cross-scenario adoption.
Second, can USDC become the financial network standard?
Main references: Visa, SWIFT, DTCC, and CLS.
Key verification points are financial institution connections, network density, process embedding, reliability, and standard control.
Third, can Circle become the charging layer in the network?
Main references: Visa, Stripe, AWS, and Red Hat.
Key verification points are pricing power, enterprise services, developer platforms, value-added income, channel bargaining power, and non-reserve income.
Among these three questions, the third question is the most important for CRCL shareholders.
USDC can become a very successful digital asset while sharing most of the economic value with exchanges, public chains, wallets, banks, and users. Only when Circle controls sufficiently important control points and forms a sustainable charging capability in payments, settlements, compliance, liquidity, and developer infrastructure will the network success of USDC fully translate into shareholder returns for CRCL.
Conclusion
The value of the Winner Pattern Study lies in helping investors extract mechanisms from history while remaining vigilant about real-world differences.
When studying Circle, the most dangerous approach is to seek a grand analogy and then fit Circle entirely into it. Circle does not have a single historical template; it exists at the intersection of multiple winning patterns:
USDT provides a digital dollar distribution model
Visa provides a payment network and charging model
SWIFT and DTCC provide financial infrastructure models
Stripe and AWS provide developer platform models
Red Hat provides an open network commercialization model
The relationship between Circle and Coinbase reveals channel bargaining and value distribution issues
What truly determines the long-term value of CRCL will be whether these patterns can simultaneously exist within Circle and how much economic value created by the USDC network Circle can ultimately retain.
Risk warning
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