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06-12

🌊 Circle up 280 % YTD β€” Surf the Stablecoin Tsunami or Bail Before the Break?

$Circle Internet Corp.(CRCL)$  , the engine behind USDC, has ripped nearly 3Γ— since January. The move screams β€œcrypto-beta on leverage,” but a closer look shows a textbook macro + fundamentals cocktail.

πŸš€ Why the Rally Happened

1. Rate-windfall bonanza – Circle earns interest on the Treasury bills backing USDC. 5 % front-end yields = fat gross margins.

2. ETF & TradFi adoption – BlackRock’s BUIDL fund and tokenised Treasuries funnel institutional money straight into USDC rails.

3. T+0 settlement envy – Banks can’t match 24/7 stable-coin payments; merchants and fintech apps flock to the rails.

4. IPO pipeline glow – Rumours of a revived direct listing/SPAC at a $15 bn+ valuation sharpened FOMO.

πŸ† Bull Case

Sticky network effect – 200 + dApps, fintechs, and exchanges integrated; switching costs rise as adoption deepens.

Reg-tailwind – A bipartisan stable-coin bill would force weaker competitors to exit, leaving USDC & PYUSD as incumbents.

Cash-flow machine – Even if USDC market cap stalls, reinvesting reserve float into short Treasuries could keep EPS compounding.

⚠️ Bear Case

Fed cuts – Every 100 bp drop could shave ~20 % off interest income.

Regulatory choke-point – If the bill imposes narrow-bank rules, Circle’s cost structure balloons.

Competition – PayPal, Stripe, and even JPM Coin could lure away on-chain settlement volume.

Crypto liquidity cycles – A sharp BTC/ETH draw-down typically drags USDC supply (and Circle revenues) lower.

πŸ” Trade View

Momentum Long

β€’ Entry zone: Break over $135 on volume

β€’ Stop: $118

β€’ Target: $155

β€’ Rationale: Ride continuation if ETF hype persists

Swing Pullback

β€’ Entry zone: $100–$105

β€’ Stop: Close below $95

β€’ Target: $130

β€’ Rationale: 38 % Fib retrace + prior breakout shelf support

Income Play

β€’ Strategy: Sell Aug $90 cash-secured puts

β€’ Stop: None (comfortable owning at $90)

β€’ Goal: Harvest implied-vol premium

β€’ Rationale: Generate income while positioning to accumulate shares at a discount

πŸ““ My Moves

Sold β…“ of core at $128 to lock gains.

Keeping the rest with a trailing stop at $114 (just under the 50-DMA).

Eyeing Aug $90 cash-secured puts at ~12 % annualised if the market finally exhales.

Circle Profit Limited! What's the Fair Price, Under $100?
As long as interest rates continue to decline in the future, CRCL’s revenue and profits will face multiple layers of pressure. Unless there's an explosive surge in USDC circulation, its profit potential will remain tightly capped under the interest rate "ceiling." ----------- Is the stock doomed? How do you view Goldman Sachs's $83 PT?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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