Circle Internet Group, Inc.CRCL
Circle Internet Group, Inc. Fair Value Disclosure
10. Fair value measurements
Recurring fair value measurements
The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis. The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, stablecoin receivables, prepaid expenses and other current assets, and accounts payable and accrued expenses approximate their fair values due to their short-term nature.
Table 10.1. Fair Value Hierarchy | |||||||||||||||||||||||||||||||||||
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Cash equivalents (1) | $ | 67,483,506 | $ | — | $ | — | $ | 37,841,697 | $ | — | $ | — | |||||||||||||||||||||||
| Digital assets | 86,515 | — | 31,330 | — | — | ||||||||||||||||||||||||||||||
Digital financial assets | 542 | — | — | 14,328 | — | — | |||||||||||||||||||||||||||||
Investments - derivatives and embedded derivatives (2)(3) | — | 1,372 | — | — | 9,332 | — | |||||||||||||||||||||||||||||
Accounts receivable, net - embedded derivatives (4) | — | 19,942 | — | — | — | — | |||||||||||||||||||||||||||||
| Total assets | $ | 67,570,563 | $ | 21,314 | $ | — | $ | 37,887,355 | $ | 9,332 | $ | — | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
| Convertible debt, net of debt discount | $ | — | $ | — | $ | 36,821 | $ | — | $ | — | $ | 40,717 | |||||||||||||||||||||||
| Warrant liability | — | — | — | — | — | 1,591 | |||||||||||||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | 36,821 | $ | — | $ | — | $ | 42,308 | |||||||||||||||||||||||
(1) Included $66.3 billion and $37.5 billion of Circle Reserve Fund as of December 31, 2025 and December 31, 2024, respectively.
(2) The fair value measurement is based on the quoted market price of the underlying digital asset.
(3) Excluded the host contract balance of $1.2 million and $0.8 million as of December 31, 2025 and December 31, 2024, respectively.
(4) Excluded the host contract balance of $4.0 million as of December 31, 2025.
During the year ended December 31, 2025, $4.6 million of digital assets related to blockchain rewards revenue which were classified as Level 3 within the fair value hierarchy due to the absence of quoted market prices, inherent lack of liquidity, and reliance on unobservable inputs, were transferred from Level 3 to Level 1 when the digital assets were listed on centralized exchanges and quoted prices in active markets became available.
Warrant liability
The Company had issued warrants convertible into Series E preferred stock at a price of $16.23 per share. The warrants were classified as a non-current liability and were fair valued using a probability weighted model based on the fair value of the Company’s common stock at the balance sheet date. The Company revalued the warrants at each reporting period and recorded the change in fair value in the Consolidated Statements of Operations. On February 20, 2025, the Company issued an aggregate of 45 thousand shares of Series E preferred stock to the warrant holders upon the cashless exercise of those warrants which were subsequently converted one-for-one to Class A common stock upon completion of the IPO. The changes in carrying value of warrant liability are reflected in the following tables (in thousands):
Table 10.2. Changes in Carrying Value of Warrant Liability | |||||
| Balance as of December 31, 2024 | $ | 1,591 | |||
Warrants exercised | (1,591) | ||||
| Balance as of December 31, 2025 | $ | — | |||
| Balance as of December 31, 2023 | $ | 1,642 | |||
| Fair value adjustment | (51) | ||||
| Balance as of December 31, 2024 | $ | 1,591 | |||
Convertible debt, net of debt discount
On March 1, 2019, the Company issued a convertible note in connection with an acquisition. The note had an original par value of $24.0 million, a 2.9% interest rate, and matures on March 1, 2026. The note was convertible into Series E preferred stock prior to the IPO, and is convertible into Class A common stock after the IPO. In September 2024, certain holders of the Company’s note converted their principal balance of $8.3 million into 524 thousand shares of Series E preferred stock at a conversion rate of $16.23 per share. In October 2025, certain holders of the Company’s convertible notes converted their principal and accrued interest balance of $11.0 million into approximately 675 thousand shares of Class A common stock at a conversion rate of $16.23 per share. The Company elected the fair value option for recording this note. We measured the fair value of our convertible debt using the probability weighted “as converted” model. The change in fair value of the note is recorded in Other income (expense), net in the Consolidated Statements of Operations. The changes in carrying value of convertible debt, net of debt discount are reflected in the following tables (in thousands):
Table 10.3. Changes in Carrying Value of Convertible Debt | |||||
| Balance as of December 31, 2024 | $ | 40,717 | |||
| Net discount on convertible notes | 735 | ||||
| Capitalized interest | 334 | ||||
| Fair value adjustment | 83,725 | ||||
| Fair value adjustment – credit risk | 71 | ||||
Conversion of convertible notes | (88,761) | ||||
| Balance as of December 31, 2025 | $ | 36,821 | |||
| Balance as of December 31, 2023 | $ | 58,487 | |||
| Net discount on convertible notes | 1,062 | ||||
| Capitalized interest | 479 | ||||
| Fair value adjustment | (3,428) | ||||
| Fair value adjustment – credit risk | (1,095) | ||||
Conversion of convertible notes | (14,788) | ||||
| Balance as of December 31, 2024 | $ | 40,717 | |||
The following significant unobservable inputs were used in the valuation:
Table 10.4. Significant Unobservable Inputs | |||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| Discount rate | 8.0 | % | 7.5 | % | |||||||
| Volatility | 44.8 | % | 65.0 | % | |||||||
| Risk-free rate | 3.7 | % | 4.1 | % | |||||||
Nonrecurring fair value measurements
Non-financial assets and investments accounted for under the measurement alternative are measured at fair value on a nonrecurring basis. Certain investments accounted for under the measurement alternative were impaired or adjusted for observable price changes in orderly transactions involving the same or similar investment. Refer to Note 8 for further details. These fair value measurements are based on Level 3 inputs, predominantly projected cash flows from the underlying investments and an applicable discount rate used in an income approach.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.