’21 Banks’ Are Brokering SpaceX

May 11, 2026

’21 Banks’ Are Brokering SpaceX.

FEATURED: The Stablecoin Trade Is Now Investable

The Regulatory Moment That Just Happened

The GENIUS Act was signed into law on July 18, 2025, establishing the first federal framework for payment stablecoins. It requires 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and mandates monthly public disclosures of reserve composition. That part is done.

What wasn’t done was the Digital Asset Market Clarity Act, a broader crypto market structure bill that allocates regulatory authority between the SEC and CFTC, and addresses stablecoin reward programs. The bill had been stalled for months over one question: can crypto companies keep paying yield on USDC, or does that look too much like a bank deposit?

The compromise text bans stablecoin issuers from paying yield or interest in a manner that is economically or functionally equivalent to a bank deposit. It explicitly protects activity-based reward programs, allowing platforms like Coinbase and Circle to continue offering rewards for platform participation and genuine usage. That single resolution broke a deadlock between the crypto industry and the banking lobby that had been dragging on for months. Polymarket odds of the Clarity Act passing in 2026 jumped from 46% to 64% after the text dropped. And on May 9, the Senate Banking Committee officially scheduled a markup session for May 14.

There’s still real risk here. The bill must clear the committee, survive a full Senate floor vote requiring 60 votes, and be reconciled with House legislation. The legislative calendar gets tight heading into the November midterms. Galaxy Research has publicly estimated the odds of CLARITY becoming law in 2026 at roughly 50-50. So this is progress, not a certainty.

Circle’s Q1: The Numbers

Circle reported Q1 2026 results this morning. Total revenue and reserve income came in at $694 million, up 20% year over year. That missed Wall Street’s consensus estimate of roughly $715 million. GAAP EPS of $0.21 beat expectations by $0.03. Net income from continuing operations fell 15% to $55 million, largely reflecting a quadrupling of stock-based compensation to $51.8 million following the June 2025 IPO. Adjusted EBITDA grew 24% to $151 million.

The volume numbers are striking. USDC in circulation hit $77 billion at quarter end, up 28% year over year. USDC on-chain transaction volume reached $21.5 trillion in Q1, up 263%. USDC represented 63% of all stablecoin transaction volumes during the quarter, according to Visa Onchain Analytics.

Slight tangent here, but worth noting: Circle’s CPN network hit $8.3 billion in annualized transaction volume as of March 31. In April, they launched Managed Payments, which lets financial institutions run stablecoin payment infrastructure without managing digital assets directly. These are early revenue lines, but they’re real.

The concern is the income statement trajectory. Revenue-sharing arrangements with Coinbase, rising technology costs, and post-IPO compensation have pushed operating expenses up 76% year over year to $242 million in Q1. Circle reaffirmed multi-year USDC growth guidance of roughly 40% compound annual growth, with FY 2026 adjusted operating expenses projected between $570 million and $585 million. Margin is the thing to watch.

The Names and What You’re Paying

On valuation: CRCL is not cheap. Forward P/E sits around 108x, against an industry average closer to 10x. The company trades at a price-to-sales ratio of roughly 7.7x. Analyst consensus is a moderate buy with an average price target around $125-127. The growth case is there, but the multiple demands flawless execution on the Arc blockchain buildout and Circle Payments Network expansion. That’s a lot to price in with operating expenses running hot.

Coinbase (COIN) is a different situation. Q1 2026 revenue came in at $1.4 billion, down 21% quarter over quarter as crypto market cap and trading volumes both fell more than 20% during the quarter. The company posted a net loss of $394 million but still generated $303 million in adjusted EBITDA, its 13th consecutive quarter of positive adjusted EBITDA through both bull and bear markets. The company ended Q1 with over $10 billion in cash, repurchased $1.1 billion in shares during the quarter, and announced roughly $500 million in annualized cost reductions. Forward P/E is around 64x. Not cheap by absolute standards, but considerably less stretched than CRCL. Coinbase also earns interest revenue on USDC reserves held on its platform, clearing regulatory headwinds in April around that business.

PayPal (PYPL) gets less attention here than it probably deserves. PYUSD was launched in 2023, has expanded to 70 global markets, and PayPal carries merchant and consumer wallet infrastructure at a scale that Circle and Coinbase don’t have. Forward P/E is around 8.5x. That’s a different kind of bet, but if stablecoins become mainstream payment rails, the distribution advantages matter.

The Part People Skip

There’s a use case that most investors are still underweighting: AI agents transacting with stablecoins. Circle’s Nanopayments product allows software agents to transact at costs as low as $0.000001 per payment across more than a dozen blockchain networks in under a second. In Q1, Circle also announced new Agent Wallets and an Agent Marketplace alongside its existing Nanopayments offering, building what it calls its Agent Stack for permissionless infrastructure. If autonomous AI agents begin handling micro-scale financial transactions at volume, the settlement layer they use will likely be stablecoin-native. Circle’s position in that stack is real, even if the revenue is not yet.

That’s not a Q2 catalyst. But it reframes what you’re actually buying when you buy CRCL.

Scorecard: Stablecoin Ecosystem

CRCL: First-mover, pure-play stablecoin issuer. Q1 revenue $694M (+20% YoY), EBITDA +24%, but revenue missed estimates. Forward P/E ~108x. Margin compression is real and ongoing. Requires execution on Arc and CPN to justify the multiple.
COIN: Q1 net loss of $394M on revenue weakness, but 13 consecutive quarters of positive adjusted EBITDA. Forward P/E ~64x. Earns reserve income on USDC. Regulatory overhang clearing. $500M in cost reductions underway. Better risk-reward than CRCL on current numbers.
HOOD: Less direct stablecoin exposure, but crypto regulatory clarity supports engagement across its platform. Valuation is more reasonable; less leveraged to stablecoin outcomes specifically.
PYPL: PYUSD now in 70 global markets. Existing merchant and consumer infrastructure at massive scale. Forward P/E ~8.5x. Underappreciated optionality on stablecoin payments adoption.
Key risk: The Clarity Act still needs committee approval on May 14, a full Senate floor vote, and House reconciliation. Any one of those steps can stall. The 50-50 odds from Galaxy Research are not far off.
Macro risk: Circle’s revenue is highly sensitive to interest rates given its reserve income model. Rate cuts compress margins even as USDC volume grows.

The stablecoin market has crossed $300 billion in total capitalization. That’s not a speculative number from a bull case. That’s where we are today. The GENIUS Act gave this sector its first federal rulebook. The CLARITY Act, if it passes, gives it a full market structure. These are real changes with real consequences for who can own these assets, how they get valued, and how big they can get.

The question isn’t whether the sector is investable. It is. The question is what you’re actually paying for and whether the companies executing right now can grow into those multiples before the calendar runs out on this legislative window. That’s the homework.

This content is for informational purposes only and should not be considered financial advice. Investing involves risk.

The Cheap Investor is a publication of Investing Media Solutions, LLC.

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