Circle Internet Group, issuer of the prominent stablecoin USDC, saw its stock surge +19.46 % recently. The jump followed heightened investor optimism around the Genius Act, newly passed U.S. legislation designed to regulate and support stablecoins.
🔍 Latest Developments
- GENIUS Act Passed by Congress
- The bill provides a federal framework for regulated, fiat-backed stablecoins, requiring issuers to maintain 1:1 reserve backing, conduct monthly audits, and adhere to federal licensing requirements.
- President Trump has signed the act into law, accelerating regulatory clarity for the industry.
- Industry officials, including Circle’s CSO Dante Disparte, celebrated this as a transformative step for stablecoin adoption.
- Stock Response
- Circle’s stock surged ~20%, marking a six-fold rise since its June IPO.
- However, after the final House vote, the stock retracted slightly as market participants locked in profits.
- Analyst Views
- Mizuho (Dan Dolev) initiated coverage with an Underperform rating and a $85 price target (≈ -59%), warning of an overvalued stock and intensifying competition from tech giants like PayPal and Amazon.
- J.P. Morgan also tagged Circle as a compelling short candidate due to its elevated valuation and competitive pressures.
- Meanwhile, Seeking Alpha and Yahoo Finance note that Circle and Coinbase are among the main beneficiaries of the Genius Act.
🧠Analyst Recommendation
Mixed opinion with a cautious tilt:
- Bull Case: Regulatory clarity legitimizes Circle’s business model, opening doors for institutional adoption, treasury use, and broader payment integrations. USDC revenue (≈98% from reserve yields) could scale significantly.
- Bear Case: The stock appears steeply priced. Major tech and financial players entering the stablecoin space could pressure market share and margins. Reliance on interest rate yields and regulatory conditions adds uncertainty.
🔹 Recommendation Summary:
- Speculative/Momentum Investors: May consider short-term holding, while closely monitoring regulatory roll-out and potential competition.
- Fundamental Investors: Cautious to underweight. Valuation appears stretched without tangible market-share or revenue gains yet.