Circle raised 222 million USD in the pre-sale of ARC token with a valuation of 3 billion USD

Circle Internet Group raised $222 million in the ARC pre-sale, the original token of their new Arc blockchain, achieving a network valuation after a complete dilution of $3 billion.

5/12/20265 min read

Connect two financial worlds

Circle sold 740 million ARC tokens for $0.30 per token in a private pre-sale, implying a network valuation after complete dilution of $3 billion based on an initial supply of 10 billion tokens.

Andreessen Horowitz led the presale with a $75 million commitment, along with a series of Wall Street giants and cryptocurrency companies including BlackRock, Apollo Funds, Intercontinental Exchange (the parent company of the New York Stock Exchange), ARK Invest, Standard Chartered Ventures, Haun Ventures and about a dozen other investors. The participation of traditional financial institutions, especially BlackRock and ICE, in the blockchain token pre-sale represents an important turning point in institutions adopting cryptocurrency-based investment structures.

This structure reflects the careful balance between the cryptocurrency-based token economy and traditional securities compliance requirements:

25% for Circle (2.5 billion tokens): For the operation of validators, bets and network security infrastructure
60% for network participants (6 billion tokens): Distributed to developers, users and contributors who build and use Arc
15% for long-term reserve fund (1.5 billion tokens): Strategic reserve fund for the development and sustainability of the network in the future

Investor tokens are subject to multi-year lock, at least a year after Arc switched to a proof-of-stake consensus mechanism, with a holding period that can last up to four years. This extended lock period gives investors more motivation towards the long-term success of the network rather than short-term speculation. Token Purchase Agreements include the right to refund in specific cases:

If ARC token is not delivered
If the Arc network has not completed the transition to the proof-of-stare mechanism or authorized proof-of-stare mechanism before May 8, 2028
If some legal conditions, regulations or specific compliance of the buyer are not met

These backup protections are not common in traditional cryptocurrency token sales but are standard in traditional private investment funds, providing institutional investors with protection from downside risks while maintaining the upside potential from Arc's success.

Stablecoin original infrastructure for the AI-Agent economy

Arc represents Circle's most ambitious expansion beyond the issuance of USDC and payment infrastructure. CEO Jeremy Allaire described this initiative ambitiously in an exclusive interview with CNBC: "We are involved in the operating system sector and we are doing that by building this multi-party distributed model with a token, with a distributed network... and we are also involved in the application sector."

This positioning reflects Circle's perception that the release of a simple stablecoin may not provide enough competitive advantage as traditional banks prepare to launch competitive dollar tokens after the stablecoin law is passed. By building the infrastructure layer on which stablecoins operate, Circle aims to maintain relevance even as the market share in stablecoin issuance becomes more competitive.

Specifications and progress

Arc's public test network went into operation in October 2025, with more than 100 participating organizations, including BlackRock, Visa and HSBC. By February 2026, the test network has processed more than 166 million transactions with half-second accuracy and almost perfect uptime as these performance indicators match or outperform many active blockchains.

In April 2026, Circle confirmed that Arc would be quantum-resistant when launching the main network, introducing a post-quantum signature scheme for optional anti-quantum wallets. Circle calls anti-quantum capability a "basic requirement" for organizations to adopt - a security-oriented posture that reflects the time frame in which organizations' infrastructure operates.

Protection is as important as growth

The GENIUS Act, signed and promulgated, establishes a federal legal framework for stablecoins. A comprehensive cryptocurrency bill is expected to be voted by the Senate Banking Committee for the first time this week. This clarity removes previous legal barriers that prevented banks from issuing tokens from being guaranteed in dollars.

Large banks such as JPMorgan, Bank of America, Wells Fargo own a capital mobilization system, payment network and legal relationships that can allow the rapid expansion of the provision of stablecoins. Unlike Circle, which must keep reserves in separate custody accounts, banks can integrate stablecoins directly into their existing deposit and payment infrastructure.

Circle's first quarter earnings report 2026 highlighted the growing competition from profitable digital assets, including crypto market funds (TMMF). These tools provide users with direct access to treasury bond yields, which USDC does not explicitly provide, because Circle retains reserve interest rates. Competitors offering yields can weaken USDC's market position.

If banks launch competing stablecoins, Circle's core value will shift from stablecoin issuers to infrastructure providers. Arc helps Circle take a position to provide banks, fintech companies and other issuers with the blockchain infrastructure on which their stablecoins operate and gain value even if USDC loses market share.

Results of the first quarter of 2026: Strong growth, increased costs

The announcement of the ARC pre-sale was accompanied by Circle's 2026 first quarter earnings report, showing strong revenue growth but affected by pressure to reduce profit margins due to post-IPO expenses:

Revenue and growth:

Total revenue and income from reserves: 694 million USD (up 20% year-on-year, but lower than analysts' estimates of 715 million USD)
Income from reserves: 653 million USD (up 17% over the same period last year)
Profit before tax, interest and adjusted depreciation (Adjusted EBITDA): 151 million USD (up 24% over the same period last year)

USDC ecosystem indicators:

USDC in circulation: 77.0 billion USD (up 28% over the same period last year)
On-chain transaction volume: 21.5 trillion USD (up 263% over the same period last year)
USDC market share: 28% of stablecoin market
USDC trading market share: 63% of total trading volume of stablecoin
The number of "meaningful" USDC wallets: 7.2 million (up 47%) (Compared to the same period last year)

Profit pressure:

Net profit from ongoing business: $55 million (down 15% year-on-year)
Operating expenses: Increased by 76% over the same period last year, mainly due to the cost of compensation in shares after IPO and related salary tax
Adjusted operating expenses: 32% increase year-on-year to $136 million

Profits exceeded forecast per share ($0.21 compared to an estimate of $0.17) despite lower-than-expected revenue and reduced net profit reflecting the company's ability to manage costs compared to profit indexes, although a 76% increase in operating costs shows significant investment in growth initiatives, including Arc development.

Circle has confirmed its 2026 forecast for other revenue, profit margins and adjusted operating costs, but has clearly ruled out the future financial impact of the pre-sale of ARC tokens, Arc incentive programs and future Arc revenue sources. This shows that the management expects Arc to become an important business segment but is not ready to give specific financial guidance.

Evaluation and conclusion

This financial event is a case study of how long-standing financial institutions overcome the conflict between traditional corporate structure and cryptocurrency-based innovation. The structure of the deal - a publicly listed company conducts pre-sale of regulatory compliant tokens to leading institutional investors with conditional repayment rights and a multi-year lock period reflects the careful consideration of legal factors, corporate governance and the market. It provides a pattern that others will study and can copy.

Whether Arc will succeed in the stated mission of becoming an infrastructure for stablecoin payments and trading through AI agents is still uncertain. The blockchain picture is full of heavily invested projects but failing to achieve a fit between the product and the market or overcome the network effect of existing companies. But Circle brings advantages that most blockchain projects lack: an existing business that generates nearly $700 million in revenue per quarter, distributes through $77 billion USDC in circulation and relationships with institutions that have used stablecoins.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrencies. This is not financial or investment advice at all. Every investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The opinion in the article does not represent the official position of the platform. We recommend that readers do their own research and consult experts before making any investment decisions.

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