Circle Now Facing Key Test (Rating Upgrade)

Bill Maurer36.66K FollowersFollow5ShareSavePlay(8min)CommentsSummaryCircle has experienced extreme stock volatility, rising nearly 10x post-IPO before retracing sharply as valuation concerns mounted.USDC in circulation continues to grow, but recent momentum has slowed and is not matching last year’s late-year surge.CRCL’s revenue is very sensitive to short-term interest rates; further Fed cuts threaten growth unless USDC circulation accelerates meaningfully. Gri-spb/iStock via Getty Images One of the wildest rides in the market this year has come from Circle Internet Group, Inc. (CRCL). The company behind the USDC stablecoin saw its shares rocket higher from their $31 IPO price toThis article was written byBill Maurer36.66K FollowersFollowI am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have been active in the markets for several years, and am primarily focused on long/short equities. I hold a Bachelor of Science Degree from Lehigh University, where I double majored in Finance and Accounting, with a minor in History. My major track focused on Investments and Financial Analysis. While at Lehigh, I was the Head Portfolio Manager of the Investment Management Group, a student group that manages three portfolios, one long/short and two long only. I have had two internships, one a summer internship at a large bank, and another helping to manage the Lehigh University Endowment for nearly a year. Disclaimer: Bill reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow do declining short-term rates impact CRCL’s forward revenue growth?CRCL’s revenue is largely driven by interest on reserves; further Fed rate cuts could significantly constrain growth unless USDC circulation rises dramatically.What is the significance of USDC distribution between Coinbase and Circle platforms?USDC held on Circle’s platform has increased to 14% from 2% YoY, improving CRCL’s margins, while Coinbase’s share has plateaued, affecting payment obligations and ecosystem incentives.How does CRCL’s 2025 revenue outlook compare to analyst expectations?Projected 2025 revenues ($2.85–$2.90B) fall short of the $3.33B consensus unless USDC grows at least 40% annually or rates remain elevated.Recommended For You