Why Circle Should Outperform Coinbase

Both Circle Internet Group (NYSE: CRCL) and (NASDAQ: COIN) have been down recently, particularly in light of the market's bearishness since last fall. It's a buying opportunity for both, but does that mean both are equally good buys? Let's find out.

Circle and Coinbase are closely related, both operating in the crypto space. Coinbase is a major crypto exchange. Most revenue comes from transaction-based fees from crypto trading, with recurring subscriptions accounting for a smaller but growing share.

Circle mints stablecoins through a process of tokenization. Circle takes a real asset, like the US dollar, and create a token of it on the blockchain. Its primary product is USDC and earns revenue from short-term interest on the real USD it keeps in reserve. USDC is the second-largest USD stablecoin, after USDT. With these things in common, Coinbase was one of Circle's first major distributors, and it shares in the interest earned on USD.

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Source Fool.com