Circle Stock Skyrocketed Can the Stablecoin Giant Keep Winning?

Circle just went public, raised over a billion dollars, and the stock shot up 750%.
Now it’s coming down fast.
And everyone’s asking the same thing:
“Is this the next big thing in fintech… or another overhyped crypto play?”

Here’s the deal:
Circle generates revenue from interest on its USDC reserves.
So when the Fed cuts rates?
That income drops fast.
Oh, and half of it already goes to Coinbase.
Yup, 50% off the top.

Everyone’s hyped about regulation unlocking growth.
But I’m watching one signal they’re ignoring:
If Circle wins a National Trust Charter, it could become crypto’s first real bank.

So… should you buy the stock at $168?
Or is the smart move to wait for the next leg down?

Let’s get into it.

Circle’s Overview

Circle Internet Group is the company behind the USDC-  the second-largest stablecoin in the world, pegged to the U.S. dollar. It’s used primarily for digital payments, cross-border transfers, and as stable collateral across crypto trading and financial applications.

Circle was founded in 2013 as a peer-to-peer application before shifting to stablecoin infrastructure for businesses and institutions. In 2021, the company made its first attempt to go public through a high-profile SPAC deal, but the transaction ultimately fell through. After years of delays, Circle finally went public on June 5, offering 34 million shares at $31 each and raising over $1.1 billion. Its stock soared as much as 750% above the IPO price.

Investing in IPOs can be very exciting, especially for those of us who are always on the lookout for the next big opportunity. When we invest or buy a stock that just IPO’d, we’re all after the potential reward, right? When you get in early on a company and it takes off, the returns can be incredible. I mean, IPOs also give us the chance to invest in companies that could be on the verge of something big. They’re often in growth mode, they’ve got lots of investor interest, and they’re ready to scale. For long-term investors who can withstand the ups and downs, early access can be a significant advantage. I mean, just think of Amazon or Facebook  – if you bought at the beginning, and held the stocks, you’d be rich. 

But, for most, investing in IPO’s is more of a dream than reality because most of us can’t handle the ups and downs these stocks will face. Investors are often after short-term gains, not really interested in holding a stock for 5 or 10 years. 

And stability is not exactly something you’d call a cryptocurrency company. 

After a breakout first month, the stock skyrocketed as high as $262 before coming down to $168.10, where it is now at the time of recording. 

14 Wall Street analysts rate Circle’s stock a “Hold,” suggesting cautious optimism as the market looks for more proof of long-term performance from the relatively new company.

Why It’s in the Spotlight

But even with a consensus “Hold” rating, investors are still going crazy over Circle. Why is that?

Well, it’s because of the Senate’s passage of the Genius Act, which essentially allows stablecoins through a federal regulatory framework. While many traditional investors have long dismissed crypto companies as too speculative or unproven, formal recognition from the government marks a significant shift in the narrative, highlighting that this crypto company is to be taken seriously. And the result? Another sharp rally, just as the IPO excitement began to settle.

Circle’s Financials

Now, Buzz is one thing, but the fundamentals are another. So, how does a company that doesn’t sell a physical product or mainstream service make money? The answer is: interest earned on USDC reserves and charges for its crypto infrastructure services.

As a newly public company, Circle hasn’t filed quarterly or annual reports under the SEC’s 10-K or 10-Q formats yet.

A 10-K is an annual report that publicly traded companies are required to file with the U.S. Securities and Exchange Commission (SEC). It’s a comprehensive and detailed summary of a company’s financial performance over the entire fiscal year, often considered the gold standard for evaluating a company’s business and financial condition.

And the 10-Q filing is essentially the same as the 10-K, only it’s the quarterly report. 

To get the financials of a newly IPO’d company, we look into their S-1 filing. Companies file an S-1 as part of their process of going public. The filing is made with the SEC and provides investors with information about the company’s business, financials, and what exactly is being offered. 

In Circle’s S1, we see sales rose 58.5% year-over-year to $578.6 million in the latest quarter ending March 31.. Its annual performance also looks to be on an uptrend, with sales increasing 15.6% from 2023 to 2024 and 87.9% from 2022 to 2023.

The company has not only remained profitable, but it is also gaining momentum. In first-quarter 2025, net income rose 33.2% year-over-year. 

In terms of profits,  full-year net income declined 42.2% from 2023 to 2024.

Now, after going public, can Circle maintain its positive momentum? Or are we going to see some major changes in their financials? We’ll find out in the coming weeks

Growth Catalysts

For any successful IPO, the IPO is the beginning. The IPO was successful because there’s a lot of interest. But Circle will need to prove itself.

The most significant catalyst for its growth would be regulation, specifically the Genius Act.

This stablecoin law provides the regulatory clarity the market has long been waiting for, and Circle is well-positioned relative to the Act’s requirements, such as reserve transparency, operational safeguards, and regulatory oversight.

The removal of these barriers to institutional adoption paves the way for broader usage. With Circles being ready, it could solidify trust, partnership, and soon integration, establishing USDC’s market position.

And also, Circle is applying for a National Trust Charter.

If it were to be approved, a National Trust Charter would allow Circle to operate as a federally regulated trust institution under OCC’s oversight. Meaning, Circle would gain authority to manage USDC reserves directly, offer custody services to institutional clients, and operate within a bank-grade regulatory framework, which potentially unlocks new institutional demand and deepens integration with the traditional financial system.

Think about your paycheck. Most people have it directly deposited into a traditional bank account, even though fintech apps offer faster access and higher yields. Why? Trust, inertia, and the safety of it being familiar. That’s Circle’s uphill climb: even if USDC is more efficient and transparent, it has to overcome decades of financial habits baked into banks and payment systems.

Risks & Red Flags

Now, it may seem that the stage is set for Circle’s rise, but there’s a big catch

Generally, rate cuts are positive for the broader economy, but not for Circle. Today, the company earns primarily from interest on reserves backing USDC, which are held in short-term U.S. Treasuries and cash equivalents.. With rate cuts being almost a certainty with the latest jobs numbers, treasury yields fall, directly reducing Circle’s income from reserves.

Second is Circle’s partnership with Coinbase, which is a double-edged sword.

Coinbase is one of the largest U.S.-based cryptocurrency exchanges, which has played a significant role in distributing USDC and driving its adoption. However, based on Circle’s S-1 filing, Coinbase receives 50% of the residual income from USDC reserves based on its share of USDC holdings, which is a limiting factor for Circle’s upside potential. This situation could worsen when rates are cut, as reserve yields decline, yet revenue-sharing obligations to Coinbase remain fixed.

Valuation Breakdown

So, the golden question is: Should you buy Circle stock today?

Well, let’s try to consider its valuation. A circle doesn’t pay dividends, so Income could only be generated from capital appreciation, which highlights the importance of timing.

Unlike traditional stocks, it’s tricky to determine the valuation of Circle because we need to understand how much the company can grow. Some say Circle’s model is unsustainable because of its current market base, which is believed to be cryptocurrency investors who are used to buying the rumour and selling the news.

Also, there is no significant reason behind the stock’s surge. I mean, sure, we have support of the coin in principle, but I think we need a little more proof, such as adoption or financials.

Who Should Buy This?

So, should you buy a circle? Well, if you are an investor who prefers stability, then without question, this stock is not for you.

But if you have a firm conviction about its stablecoin technology and its vision to revolutionise the finance industry, then Circle could be a great addition to your portfolio. But I don’t think that Circle’s path to success is certain.

If you can endure crypto-like volatility and you’re prepared to hold the stock, 3, 5, or even 10 years – well, then, you might be pleased down the road.