Should you bet on Circle (CRCL) now that its Ultra ETF lets you 2X the rally?

**The decision to bet on Circle (CRCL) should be approached with caution due to the high risk involved.** Here's why:

1. **Recent Performance**: Circle's stock has experienced a significant decline of 25.56% over the past month. This recent volatility might indicate heightened investor uncertainty or market skepticism about Circle's future prospects.

|code|Ticker|Name|Date|Closing Price|Percentage Change|market_code|
|---|---|---|---|---|---|---|
|CRCL|CRCL.N|Circle|20250808|159.03|3.9888|169|

2. **Ultra ETF's 2X Leverage**: The ProShares Ultra CRCL (CRCA) ETF offers 2x daily exposure to Circle's stock. While this leverage can amplify gains, it also doubles the potential for losses. Investors should be prepared for the stock's daily fluctuations to be magnified.
3. **Market Sentiment**: The launch of the Ultra ETF reflects growing interest in leveraged exposure to Circle, likely driven by the company's role in the digital asset ecosystem and its connection to the regulated stablecoin USDC. However, sentiment can shift quickly in the volatile crypto and tech markets.
4. **Regulatory and Market Risks**: The GENIUS Act's passage provides a regulatory framework for stablecoin issuance, which is a positive for Circle and the digital asset ecosystem. Yet, regulatory changes, market shifts, or competition could negatively impact Circle's business.
5. **Investor Considerations**: Investors should assess their risk tolerance and investment horizon. The ETF is designed for daily trading, and longer-term holders may lose out on potential daily gains due to volatility decay. Compounding risks over time can be significant with leveraged exposure.
6. **Expense Ratio and Liquidity**: The CRCA ETF has an expense ratio of 1.08% and a $25/share NAV at launch. These factors, along with liquidity, can impact the fund's performance over time.

In conclusion, while the Ultra ETF's 2X leverage offers an opportunity for amplified returns, it also introduces substantial risk. Investors should weigh these factors against their investment goals and consider the potential for short-term volatility and long-term risks before betting on Circle. It's advisable to review the fund's holdings, risk disclosures, and consult with a financial advisor to make an informed decision.