Vanguard's Circle Holdings Face Over $400 Million Unrealized Loss in Q4 Filing

Vanguard Group, the world’s second-largest asset manager, disclosed an unrealized loss of over $400 million on its Circle (CRCL) holdings in its Q4 13F filing. The filing, submitted on February 14 to the U.S. Securities and Exchange Commission (SEC), showed that the firm holds 5,653,110 shares of CRCL, with a current fair value of $339.4 million. The cost basis for the position remains at $739.6 million, resulting in a substantial unrealized loss.

The 13F filing is a standard requirement for institutional investors managing over $100 million in 13(f) securities. These filings provide transparency into portfolio changes and are due within 45 days of the quarter’s end. Vanguard’s filing highlights the volatility in the crypto market and its impact on institutional investments.

Circle Internet Group, the stablecoin issuer, reported strong earnings for Q3 2025, with $0.64 per share and $740 million in revenue. Despite these figures, the firm’s shares fell 7.42% in pre-market trading, reflecting investor concerns over future guidance and broader market conditions.

Why Did This Happen?

The unrealized loss for Vanguard reflects a significant decline in the fair value of its Circle holdings compared to its cost basis. This drop may be attributed to the mixed performance of the crypto market and broader investor sentiment. While Circle showed robust financial metrics, the market reacted negatively to management’s outlook and external conditions.

Circle’s Q3 earnings demonstrated 66% year-over-year revenue growth and a 78% increase in adjusted EBITDA. The company also reported a 108% year-over-year increase in USDC in circulation, reaching $73.7 billion. However, these gains did not translate to a positive stock price, with shares declining over 13% in the past week.

How Did Markets React?

Market participants remain cautious about Circle’s future performance despite its financial success. The 7.42% pre-market drop in shares highlights the sensitivity of the crypto space to macroeconomic and regulatory factors. The firm’s management has provided modest EPS growth guidance for the coming quarters, focusing on expansion in blockchain support and the ARC network.

Investor concerns are not unique to Circle. The broader crypto market has experienced significant volatility since the company’s initial public offering (IPO) in June 2025. Priced at $31 per share, Circle’s IPO raised $1.1 billion and valued the company at $6.9 billion. The IPO, the second major crypto company listing under the Trump administration, aimed to provide regulatory clarity and access to capital markets.

What Are Analysts Watching Next?

Analysts are closely monitoring Circle’s ability to maintain and expand its position in the stablecoin market. Recent partnerships, such as the revenue-sharing deal with Lighter, could provide much-needed support. Lighter is expected to receive a share of the interest income from USDC deposits, potentially generating $30–$40 million annually. This collaboration may help reduce funding costs for traders and increase open interest on the platform.

Investors are also watching for any regulatory developments that may impact the crypto space. The U.S. has been discussing stablecoin regulations, and publicly traded issuers like Circle may benefit from clearer guidelines. However, these discussions remain ongoing, and uncertainty persists.

For Vanguard, the unrealized loss raises questions about the long-term viability of its investment in Circle. While the firm may hold the position for appreciation, the current market dynamics suggest that patience may be required. Institutional investors are advised to assess both the short-term volatility and the long-term potential of the crypto market.