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 those of Visa and Mastercard; if viewed as a settlement infrastructure between financial institutions, it resembles SWIFT, DTCC, and CLS; if considered 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 companycontinue 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 winner patterns correspond to each layer of Circle's business? Does it possess the key success criteria that have been truly critical for these historical winners?
This is where the Winner Pattern Study can play a role.
1. What is the Winner Pattern Study?
In 2022, Xue Xin, founder of Today Capital, reflected on an important lesson from her investment career during an interview with Nanjing University's alumni:When studying a single company, investors can easily fall in love with that company and eventually become trapped in "seeing the trees but not the forest.".
To address this issue, she summarized athree-part research methodology:
Study the rules of winners to understand what great companies look like.
Deeply understand consumers and users.
Study the main companies in the industry one by one, establishing a complete industry map.
The first part is theWinner Pattern Study.
The study of winners, as Xue Xin mentioned, is not simply about reading a few business stories. Using the retail industry as an example, the research team systematically read biographies, historical materials, and financial reports of companies like Amazon, Walmart, Costco, 7 Eleven, Aldi, and Walgreens. The research content also includes founder speeches, quarterly performance meetings, and strategic changes, focusing on understanding how winners are formed step by step. (
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Therefore, the Winner Pattern Study can be summarized as a research chain:
Historical winner samples → Key success factors → Causal mechanisms → Current company comparison → Verifiable indicators
Its purpose is to establish an industry causal map, avoiding judgments based solely on company narratives, short-term data, or superficial comparisons.
2. Six Key Points of Winner Pattern Study
1. Research the Historical Process of Winners
Studying a mature company statically often reveals its brand, scale, profit margins, and network effects, but it fails to show the sequence of how these results were achieved.
The real questions to research are:
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 multiple layers of fees?
Why were competitors unable to replicate its success?
The winner pattern exists in the development path, not just in the final financial statements.
Visa today has a global network, brand, standards, and risk control capabilities, but these capabilities have evolved through a long process of authorization, clearing, settlement, cross-border connections, and value-added services. VisaNet established electronic authorization and clearing systems in the 1970s and subsequently continued to expand into multi-currency processing, risk control, e-commerce, and value-added services.
2. Study Underlying Mechanisms, Avoid Staying at Industry Labels
Two companies may both engage in payments, but that 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 competency is lowering the complexity 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 US dollar distribution.
Therefore, when researching Winner Patterns, it is important to distill the causal mechanisms:
What drives growth?
What is the basic unit of network effects?
Who has control over user relationships?
Who controls the standards and interfaces?
Which layer has the right to charge fees?
Where does value flow among ecosystem participants?
3. Study both Winners and "Almost Successful" Companies
Only studying the winners can lead to survivor bias.
When studying Visa, it is important to also study Diners Club, Discover, and regional payment networks; when studying AWS, also study early cloud computing competitors; when studying USDT, also examine BUSD, DAI, PYUSD, and other stablecoins that have not reached a comparable scale.
A more rigorous approach is to configure three types of samples for each Winner Pattern:
The ultimate winner.
The long-term second place.
Companies with similar conditions but ultimately failed.
The differences among these three are often more valuable than the commonalities between winners.
4. Distinguish Industry Success from Company Success
An industry can grow rapidly while some companies within it may still struggle to generate excess returns.
The growth of stablecoins does not automatically mean Circle will see corresponding profit growth. The growth value of USDC may be shared among exchanges, wallets, public chains, banks, payment service providers, and distribution channels.
Thus, investors must separately answer two questions:
Can the USDC network succeed?
Can Circle shareholders obtain a sufficiently high share of network value?
Widespread adoption of the infrastructure compared to the pricing power for infrastructure owners represents two independent verification processes.
5. Transform Patterns into Falsifiable Metrics
Winner Patterns cannot remain on a narrative level.
Each analogy must translate into data that can be continuously tracked, for example:
Number and activity level of network participants
User retention rates and transaction frequency
Number of developers and production applications
Ratio of direct customers to channel customers
Revenue per transaction
Non-interest income ratio
Channel profit-sharing ratio
Customer concentration
Product cross-usage rate
When these metrics are unable to improve over a long period, the related winner patterns should be downgraded.
6. Separate Business Model Research from Valuation
Even if Circle has some early characteristics of historical winners, the stock price may have already priced in a significant amount of success expectations.
The Winner Pattern answers:
What kind of company could Circle potentially become?
The valuation analysis answers:
How much probability of success is already priced into the current market cap?
Only by combining the two can a comprehensive investment judgment be formed.
3. How to Apply Winner Pattern Study in Practice
When researching each historical winner, one can uniformly answer seven questions.
1. Initial Entry Point
What strong pain point did the company initially address?
Why were users willing to switch?
Was 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
Do new users enhance the value of existing users?
Do more transactions bring 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
Brand
User entry points
Data
Liquidity
Compliance qualifications
Developer interfaces
Clearing and settlement systems
5. Charging Points
At which level does the company ultimately charge fees?
Is the charging based on transaction volume, asset size, API call volume, subscriptions, value-added services, or revenue from reserve assets?
6. Value Leakage
Which partners hold strong bargaining power?
How much value do channels, suppliers, regulatory agencies, and infrastructure providers take away?
7. Conditions for Failure
How might technological replacements, regulatory changes, competition, channel counter-attacks, or product homogenization respectively disrupt the winner pattern?
Research on Circle should also follow these seven questions, rather than first determining a conclusion such as "the next Visa" and then seeking supporting evidence.
4. 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.
By the end of Q1 2026, the circulation of USDC reached $77 billion; the activity volume of CPN disclosed by Circle corresponds to an annualized transaction scale of $8.3 billion over the past 30 days. CPN Managed Payments allows financial institutions to offer stablecoin payments without directly managing digital assets.
It can be seen that Circle is attempting to complete three strategic leaps:
First Leap: Transforming from Stablecoin Product to Default Digital Dollar Asset
Users no longer see USDC as just one of many stablecoins, but as the default dollar asset in transactions, payments, collateral, and settlements.
Second Leap: Transforming from Digital Asset to Financial Network Standard
Financial institutions, trading platforms, payment service providers, and developers are forming stable interfaces, liquidity, and business processes surrounding USDC.
Third Leap: Transforming from Network Standard to Chargeable Control Layer
Circle consistently charges for services through payment networks, cross-chain services, wallets, compliance, liquidity, custodial services, developer tools, and management services.
The long-term return on CRCL investments ultimately depends on Circle's ability to complete the third leap.
5. Seven Types of Winner Patterns CRCL Investors Should Focus On
First Type: USDT’s Global Digital Dollar Distribution Model
Why Study This
USDT is the most direct historical sample when studying the demand, liquidity, and distribution network of stablecoins.
Tether has long emphasized two core scenarios:
24-hour US dollar liquidity in the cryptocurrency trading market.
Demand for dollar storage and cross-border transfers from emerging market users.
Tether has publicly stated that its strategic focus has long been on emerging markets and areas with insufficient coverage of traditional US dollar financial infrastructure.
What Needs to be Studied
How did USDT become the default pricing asset for exchanges?
How do trading pairs and liquidity form self-reinforcing cycles?
How do low-cost networks like Tron drive distribution?
Why do emerging market users assign different weights to compliance transparency and convenience?
What role did exchanges, market makers, and wallets play in the cold start?
After the leading network is formed, why is it difficult for latecomers to replace it?
Core Question for Circle
USDC primarily relies on regulatory compliance, institutional collaborations, and on-chain financing for growth, while USDT mainly relies on global distribution, trading liquidity, and availability of US dollars to establish its advantages.
CRCL investors need to judge:
Can USDC's compliance advantages be converted into strong enough liquidity advantages and usage habits?
Key Tracking Areas:
USDC's share in transactions, payments, collateral, and RWA
Growth of USDC balances outside Coinbase
Actual use in non-US 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 This
Visa is one of the most important Winner Patterns when Circle builds its global payment and settlement network.
Visa does not take on most consumer credit nor 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, branding, and risk control infrastructures.
VisaNet gradually expanded from electronic authorization and clearing settlement systems to cross-border processing, mobile payments, risk control, and value-added information services, forming multi-layered charging capabilities.
What Needs to be Studied
How did Visa complete the cold start on both the bank and merchant sides?
Why are financial institutions willing to join the joint network?
How do network rules reduce trust costs between participants?
How did Visa expand from core processing revenue to value-added services?
How do standards, branding, risk control, and global coverage create barriers to entry?
How does Visa distribute economic benefits with banks that have customer relationships?
Core Question for Circle
Can CPN form a similar financial institution network?
Key Tracking Areas:
Number of active Originating Financial Institutions and Beneficiary Financial Institutions
Number of payment corridors actually opened
Transaction recurrence rate of single institutions
CPN transaction volume and revenue growth rate
Whether CPN has formed a clear charging mechanism
Whether banks and payment companies expand usage scenarios after connecting to CPN
Can CPN extend from payment services to risk control, foreign exchange, liquidity, and compliance services?
For CRCL, the growth of CPN scale is just the first step. Unit transaction income, customer retention, and value-added service adoption rates will determine whether it can gradually exhibit Visa-like economic characteristics.
Third Type: SWIFT, DTCC, and CLS Financial Market Public Infrastructure Model
Why Study This
Circle's development path towards the institutional market has important similarities with traditional financial market infrastructure.
SWIFT connects global financial institutions through a unified financial messaging standard. Currently, it is a cooperative organization owned by its members, connecting over 11,000 banks, financial institutions, and corporations.
DTCC, on the other hand, has become the core post-trade infrastructure of the US capital markets through automation, centralization, and standardization, processing large-scale securities transactions daily.
The moats of these institutions mainly come from:
Unified standards
Institution connection density
Compliance credibility
System reliability
Process embedding
High switching costs
What Needs to be Studied
How does the financial industry form common standards?
Why is neutral governance beneficial for institutional participation?
How does infrastructure embed into internal bank processes?
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