Circle’s Stock Upgraded Amid Ongoing Market Challenges
- Circle’s stock received a Neutral rating from Compass Point’s Ed Engel, up from Sell, with a price target of $60, down from $75.
- The stock fell by 7.3% to $67.55 during regular trading but increased by about 1% in post-market trading.
- Over 75% of USDC is used in high-risk crypto trading or lending apps, linking its performance closely to the broader crypto market.
- USDC supply has decreased by 9% since December, facing competition from emerging stablecoins like USDH and PYUSD.
- Traditional financial institutions are developing “deposit coins” that may compete directly with USDC in developed markets.
Circle’s recent upgrade reflects a shift in perception as it begins to resemble a cyclical stock rather than a standalone fintech entity. The potential passage of the CLARITY Act could further impact the regulatory landscape for stablecoins.
Despite the upgrade, Circle’s revenue remains closely tied to speculative activities within the crypto market, evidenced by over a quarter of USDC being used for high-risk ventures.(Source)
