The stocks of Circle Internet Group (CRCL, up by 20.32%) have shown significant fluctuations during what’s being called “Crypto Week” on Capitol Hill. For example, the share price dropped by 4.6% on Tuesday due to lawmakers encountering a procedural snag, which likely postpones any votes on various cryptocurrency legislative bills.
However, shares of Circle experienced a significant rise on Wednesday, increasing by 17.1% as of 1:25 p.m. Eastern Time. Potential hurdles in the regulatory process might be resolved today, potentially bringing the week’s cryptocurrency regulatory actions back to their intended course – and this is just one aspect.
Crypto drama on Capitol Hill
Despite advancements in crypto legislation and signs of progress, the Trump administration finds itself at odds with the Federal Reserve. Various media sources report that President Trump considers dismissing Federal Reserve chairman Jerome Powell, as his cautious approach to interest rate adjustments often clashes with the White House’s objectives.
Circle Internet closely monitors changes in the Federal Reserve’s interest rate policy. The majority of their income comes from earning interest on the substantial cash reserves that underpin the consistent $1 value of the USDC (USDC experiencing a minor -0.01% decrease). A drop in the federal interest rate by 1 percentage point would reduce Circle’s annual earnings by at least $500 million, given they had approximately $44 billion in reserves for USDC support at the end of 2024.
The market value of USDC has grown to a staggering $63.3 billion since, making it more sensitive to changes in Federal interest rates when considering Circle’s financial outcomes. The escalating stock prices today hint that investors anticipate potential instability and potentially elevated interest rates should Trump decide to remove Powell from office.
What’s next?
Trump has stated that he is not planning on dismissing Powell, and it’s uncertain if the executive branch even has the power to remove Federal Reserve officials in the first place. As such, it remains to be seen how political pressure could influence Powell’s decisions regarding interest rates. The significant rise in prices today might not have occurred without the uncertainty surrounding the Fed caused by the recent congressional voting drama.
In an ideal scenario, the cryptocurrency market might conclude this week with the long-anticipated establishment of a regulatory framework. Regardless of who chairs the Fed at that point, crypto investors are yearning for regulatory certainty. As a prominent stablecoin manager, Circle Internet serves as a valuable indicator of the political shifts affecting cryptocurrencies.
Additionally, Circle has announced August 12th as the date for releasing their first financial report after going public. I am eagerly anticipating the opportunity to scrutinize the actual performance of this stablecoin issuer in hard numbers.
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2025-07-16 22:26