Circle Internet Drops 6% in a Month: Buy, Sell or Hold the Stock?

Circle Internet Group CRCL shares have dropped 5.7% in the past month, underperforming both the Zacks Financial-Miscellaneous Services industry and Zacks Finance sector, which have returned 5.2% and 1.4%, respectively. 

Circle offers USDC, which is redeemable on a one-for-one basis for US dollars. USDC, along with EURC, are digital currency tokens issued natively on blockchain networks and backed by reserves consisting of highly liquid, price-stable cash and cash equivalents. Both USDC and EURC are used for payments, settlements, and as a digital dollar store of value. 

Circle stablecoin network is used by more than 600 million users globally as of March 28, 2025. However, the company faces stiff competition from established companies including Coinbase COIN, PayPal PYPL and Fiserv FI. Coinbase has inked a deal with Shopify that will allow consumers to pay with USDC on Base (Coinbase Ethereum layer-2 network) through Shopify Payments, bringing onchain payments to millions of storefronts. Meanwhile, Fiserv’s plan to roll out a new blockchain-based digital asset platform based on a U.S. dollar-pegged stablecoin called FIUSD has been a noteworthy development.

Circle shares have underperformed its closest peers, including Coinbase and PayPal, but outperformed Fiserv over the past month. While Coinbase shares jumped 10.7%, PayPal and Fiserv fell 5.1% and 17.5%, respectively.

CRCL Stock’s Performance

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Circle Benefits From Growing Stablecoin Usage

Since its launch in 2018, USDC has been used for more than $25 trillion in onchain transactions as of March 28, 2025. According to CoinMarketCap, USDC is the second-largest stablecoin as measured by the amount of stablecoins in circulation, with a 24% share of the stablecoin market as of Dec. 31, 2024.

Improving regulatory environment, including the passage of the GENIUS Act on July 17, provides a legal background to stablecoins like USDC. This bodes well for Circle, which has minted more than $504.3 billion of USDC and redeemed more than $464.4 billion of USDC from Jan. 1, 2021, to Dec. 31, 2024. In 2024, Circle reported revenues of $1.7 billion, adjusted EBITDA of $285 million and net income of $156 million. The company had total liquidity of $1.045 billion as of Dec. 31, 2024. 

CRCL's Sales Estimate

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Circle serves its clients through Circle Mint, which is available only to institutions (exchanges, institutional traders, wallet providers, banks, and consumer apps companies). The service is expected to benefit from growing demand for stablecoins. Circle Mint supports international wires and domestic bank transfers in more than 185 countries. As of Dec. 31, 2024, there were 1,819 Circle Mint customers with accounts.

Circle liquidity services provide institutional minting, reserving, redemption, and foreign exchange services for Circle stablecoins. Moreover, Circle Wallets are gaining traction as more than 11,000 developers have engaged with the product, deploying almost 10 million wallets onchain. Circle Wallet is now used by Grab Networks, a leading superapp in Southeast Asia.

USYC Infusion to Boost CRCL’s Clientele

The acquisition of Hashnote and its TMMF, USYC, which is a tokenized product, is noteworthy as Circle’s plan to integrate USYC into the Circle stablecoin network. Unlike payment stablecoins that offer no yield, USYC offers yield to the token holders that is
generated from its invested assets, consisting primarily of reverse repurchase agreements on U.S. government and government-backed securities and short-term U.S. Treasury securities. 

Circle’s plan will enable eligible customers to move between the non-yield bearing Circle payment stablecoins and USYC at the settlement speed of the blockchain.

Earnings Estimates Revision Shows Mix Trend for CRCL

For second-quarter 2025, the Zacks Consensus Estimate for CRCL’s earnings has increased by a penny to 29 cents per share over the past 30 days. 
 

For 2025, the Zacks Consensus Estimate for Circle’s earnings has declined 11 cents to $1.10 per share over the past 30 days.

Conclusion

Although improving regulatory environment and growing demand for stablecoins are noteworthy, Circle shares are overvalued, as suggested by the Value Score of F, which is risky for investors.

Circle currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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