In the 10 days following the IPO, there was an accumulated increase of over 675%. Seaport Analysts have given Circle a Buy rating for the first time, believing that with the improvement of the regulatory environment and the increase in the acceptance of Cryptos, the stablecoin market will experience explosive growth. As a "top Crypto disruptor," Circle is expected to achieve an annual revenue growth of 25%-30%, although its business model faces challenges from interest rate risk.
The crazy rise "cannot be stopped at all"! The "first stock of stablecoin" Circle skyrocketed more than 20% overnight, with a cumulative increase of over 650% since its IPO. Despite the impressive gains, some Analysts have given the stock a Buy rating for the first time.
On Friday (June 20), the "first stock of stablecoins"$Circle (CRCL.US)$continued its crazy surge, soaring over 20% to $240.28. After the U.S. Senate passed the GENIUS bill, it experienced a significant increase for the second consecutive trading day.
According to an article mentioned by Wall Street Watch, on Wednesday, the U.S. Senate passed the GENIUS Act with a vote of 68-30, establishing a federal regulatory framework for dollar-backed stablecoins, requiring issuers to hold safe Assets such as government bonds as reserves. Following the news, Circle's stock surged nearly 30% that day.
Since its IPO on June 5, Circle's stock price has accumulated an increase of over 675%, soaring from the IPO price of $31 to a closing price of $240.28 on Friday. Despite this extraordinary increase, Seaport Research Partners Analyst Jeff Cantwell has given the stock a Buy rating for the first time, with a Target Price of $235.
Cantwell expects that with an improved regulatory environment and increased acceptance of Cryptos, the stablecoin market is poised for explosive growth. He believes that Circle, as a "top crypto disruptor", is likely to gain significant benefits during this growth phase, achieving annualized revenue growth of 25%-30%.
However, Circle's Business model is highly dependent on interest rates, with every 25 basis point rate cut expected to reduce its 2026 EBITDA (earnings before interest, taxes, depreciation, and amortization) by about $0.1 billion. Additionally, the company has to pay distribution fees to partners such as Coinbase, which also puts pressure on profit margins.
The stablecoin market is expected to double in size.
Seaport Research Partners predicts that the total market value of stablecoins will grow from the current 260 billion USD to 500 billion USD by the end of 2026, and could reach 2 trillion USD in the long term. This growth is mainly driven by the adoption of stablecoins in areas like DeFi, cross-border payments, and e-commerce.
The USDC stablecoin issued by Circle currently holds a 29% market share, second only to Tether's USDT. As more companies incorporate stablecoins into their financial management or for payments, the use cases for USDC will significantly expand.
According to reports, Circle is building financial infrastructure in an attempt to attract more businesses and customers into the cryptocurrency space. Its Circle Payments Network product helps financial institutions conduct real-time cross-border payments, showing disruptive potential in areas like vendor payments, remittances, and payroll.
The business model faces challenges from interest rate risk.
Circle's revenue primarily comes from interest income on reserve assets, which accounted for 95%-99% of total revenue over the past three fiscal years. Therefore, the growth of USDC is a core driver of its revenue, but this model also makes the company vulnerable to fluctuations in interest rates.
Sean Farrell, the digital asset strategy director at Fundstrat, pointed out that every 25 basis points of rate cut would trim Circle's 2026 EBITDA expectations by about 0.1 billion USD, requiring a 10% increase in the adoption rate of stablecoins to offset this impact.
Additionally, Circle needs to pay USDC distribution fees to partners like Coinbase, which further compresses profit margins.
It is worth noting that Farrell provided a target price of $59 on the day after the IPO, believing that "more situations in the future will put pressure on the current valuation."
The market is seeking real value support.
For stock market investors, Circle is one of the few pure stablecoin concept symbols. Tether has not gone public, and Coinbase is more of a partner rather than a direct competitor, while companies like PayPal and Block have a broader scope of business.
Circle's sky-high valuation has put Wall Street in the dilemma of judging whether its 650% increase is "real". The current stock price performance is mainly driven by the market's optimistic expectations for the stablecoin industry rather than significant improvements in fundamentals.
Cantwell believes that the current cryptocurrency and stablecoin market is similar to the fintech industry of 2016—still immature but with enormous opportunities. Against the backdrop of an improving regulatory environment, Circle remains in its early development stage, possessing long-term growth potential.
Editor/melody
