Analyst downgrades crypto’s most subscribed IPO as stock sinks
Circle Internet Group (NYSE: CRCL) went public on June 5 on the New York Stock Exchange in what became crypto’s most oversubscribed IPO in decades.
The stock surged roughly 250% in its first two trading days, the largest two-day IPO pop since 1980, fueled by strong institutional demand and optimism around stablecoin regulation following the passage of the GENIUS Act.
However, the stablecoin issuer is facing renewed scrutiny after analysts issued a bearish call for the stablecoin issuer.
Despite Circle’s strong debut this year, Wall Street research firm Wolfe Research flagged the effect of several headwinds on the stock.
On Dec.2, the firm downgraded Circle to “sell,” with analyst Darrin Peller assigning a $60 price target.
The firm has warned of further downside as the stock continues to slide from its post-IPO highs.
In the past 6 months, Circle stock has dropped by 21.18%. At press time, Circle had dropped by 5.26%, trading close to $83.92.
The target implies a potential downside of roughly 33% from the stock’s recent price of $83.98, as of Dec. 13.
While Peller acknowledged Circle’s success in building a regulatory-compliant platform for traditional financial institutions, he highlighted mounting margin pressure and rising expenses.
Circle generates more than 96% of its revenue from interest income tied to reserves backing its USDC and EURC stablecoins, making earnings highly sensitive to interest rate changes.
Stablecoins are cryptocurrencies whose value remains stable, usually pegged to a real-world asset such as the United States dollar.
As per Peller, that exposure could become a short‑term risk as the Federal Reserve is expected to cut rates again in December.
Wolfe projects Circle will generate more than $2.75 billion in revenue in 2025, but lower yields on reserves could pressure profitability.
Concerns intensified after Circle’s third‑quarter earnings report.
The company beat expectations with earnings per share of $0.64 versus forecasts of $0.34, alongside $740 million in revenue, up 66% year over year.
Mizuho analyst Dan Dolev warned that Circle’s updated full‑year guidance points to higher costs and weaker fourth‑quarter revenue trends. Mizuho has maintained its ‘sell’ rating with a price target of $70.
Analyst downgrades crypto’s most subscribed IPO as stock sinks
Circle Internet Group (NYSE: CRCL) went public on June 5 on the New York Stock Exchange in what became crypto’s most oversubscribed IPO in decades.
The stock surged roughly 250% in its first two trading days, the largest two-day IPO pop since 1980, fueled by strong institutional demand and optimism around stablecoin regulation following the passage of the GENIUS Act.
However, the stablecoin issuer is facing renewed scrutiny after analysts issued a bearish call for the stablecoin issuer.
Related: Circle CEO: We’re Trying to Protect Crypto From Traditional Banking
Circle slides post IPO
Despite Circle’s strong debut this year, Wall Street research firm Wolfe Research flagged the effect of several headwinds on the stock.
On Dec.2, the firm downgraded Circle to “sell,” with analyst Darrin Peller assigning a $60 price target.
The firm has warned of further downside as the stock continues to slide from its post-IPO highs.
In the past 6 months, Circle stock has dropped by 21.18%. At press time, Circle had dropped by 5.26%, trading close to $83.92.
The target implies a potential downside of roughly 33% from the stock’s recent price of $83.98, as of Dec. 13.
While Peller acknowledged Circle’s success in building a regulatory-compliant platform for traditional financial institutions, he highlighted mounting margin pressure and rising expenses.
Circle generates more than 96% of its revenue from interest income tied to reserves backing its USDC and EURC stablecoins, making earnings highly sensitive to interest rate changes.
Stablecoins are cryptocurrencies whose value remains stable, usually pegged to a real-world asset such as the United States dollar.
As per Peller, that exposure could become a short‑term risk as the Federal Reserve is expected to cut rates again in December.
Wolfe projects Circle will generate more than $2.75 billion in revenue in 2025, but lower yields on reserves could pressure profitability.
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Concerns intensified after Circle’s third‑quarter earnings report.
The company beat expectations with earnings per share of $0.64 versus forecasts of $0.34, alongside $740 million in revenue, up 66% year over year.
Mizuho analyst Dan Dolev warned that Circle’s updated full‑year guidance points to higher costs and weaker fourth‑quarter revenue trends. Mizuho has maintained its ‘sell’ rating with a price target of $70.
Related: Circle announces new blockchain amid blockbuster earnings