Why Circle Internet Stock Is Sinking Today

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On Tuesday, shares for Circle Internet Group (CRCL) are experiencing a dip, currently down by 8.3%, at 3:11 p.m. Eastern Time. This decline occurs while the S&P 500 is seeing a minimal increase of 0.1% and the Nasdaq Composite is facing a minor loss of 0.3%.

The financial analyst on Wall Street lowered the sell rating for USDC, which is the stablecoin offered by Circle, the second-most prominent company in this sector.

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Circle is a sell according to Compass Point

A financial expert from Compass Point has adjusted their recommendation for Circle’s shares to ‘sell’, pointing out two primary reasons: firstly, a market becoming progressively more competitive which might challenge Circle’s dominance, and secondly, doubts about its current market value.

The analyst reduced the projected value from $205 to $130 along with the downgrade, and he doesn’t foresee any positive developments even after the Genius Act was passed, which sets a regulatory structure for stablecoins in traditional banking and finance. He predicts that crypto investors will sell off their holdings following the event, leading him to anticipate that CRCL might experience a pullback due to its recent rally.

The downgrade caused a cooling effect on Circle’s momentum, as investors started to reassess the stock’s extraordinary surge.

Circle’s valuation is not sustainable

The shares of Circle have experienced a dramatic increase in value following its initial public offering, leading to a valuation that seems questionable to me. While USDC is the second most widely used stablecoin, there’s a significant risk that banks might create their own stablecoins and potentially overshadow USDC’s popularity. Given its market capitalization exceeding $43 billion and last year’s net income of only $155 million, I find this mismatch concerning, and I would advise against investing in the stock.

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2025-07-22 22:52