Circle Stock Plummets 15.5% Amid Regulatory Uncertainty

Coin WorldThursday, Jun 26, 2025 8:55 am ET
2min read

Circle Internet Group (CRCL), the world’s second-largest stablecoin issuer, has experienced a significant decline in its stock price, falling 15.5% and continuing to trend down by an additional 3.7% in early trading. This decline has resulted in a loss of approximately $5 billion in market capitalization. Despite an impressive rally that saw shares soar almost 750% from their $31 IPO price on June 5, investors are now questioning whether

is losing momentum.

The recent passage of the GENIUS Act by the U.S. Senate on June 17, which proposes a regulatory framework for stablecoins, initially boosted the prices of cryptocurrencies and related companies. Since then,

stock has surged more than 76%. Additionally, Circle’s strategic partnerships with financial services companies have further fueled the stock’s momentum. However, the recent sell-off by a prominent hedge fund manager from their ETFs has raised concerns about the stock’s future prospects.

Analysts have issued mixed recommendations on Circle’s stock, creating confusion among investors. One analyst initiated coverage on CRCL with a “Buy” rating and a price target, describing Circle as a “top-tier crypto disruptor” and highlighting the company’s strong position for long-term success, driven by an improving regulatory framework. However, the price target implied a downside potential from the previous trading day’s closing price.

In contrast, another analyst initiated coverage of Circle stock with a “Hold” rating and a price target, suggesting a significant downside potential from the closing price. This analyst believes that Circle’s stock valuation already reflects highly optimistic long-term assumptions, making it difficult to justify a higher valuation. Another firm also started coverage of CRCL stock with a “Hold” rating and an even lower price target. The firm contends that much of the bullish sentiment surrounding the regulatory framework and enhanced stablecoin adoption is already priced into the stock, despite Circle benefiting from being a regulated first-mover.

The GENIUS Act, if passed, would formalize stablecoin regulation, reducing legal risks for Circle and its partners. This regulatory clarity is seen as both bullish and bearish by analysts. While it provides a clear framework for stablecoin regulation, boosting Circle’s business model, it also means that much of the bullish sentiment is already priced into the stock. Circle’s adherence to the GENIUS Act, including 100% reserves in Treasuries and monthly audits, positions USDC as the “regulated stablecoin” of choice for institutions. However, the near-term valuation of the stock is considered rich, leading to a cautious outlook from analysts.

In summary, while the GENIUS Act and Circle’s strategic partnerships have initially boosted the stock, the recent sell-off by prominent investors and mixed analyst recommendations have created uncertainty. The regulatory framework, while beneficial in the long term, has already been priced into the stock, leading to a bearish outlook in the near term.