Circle (CRCL) stock fell 15% on Tuesday, retreating from a stunning rally fueled by optimism over stablecoin regulation and adoption, as Wall Street shifted its focus to the rising risk of competition in the digital token space.
Shares of the issuer of the USDC stablecoin (USDC-USD) snapped a three-day winning streak to close just above $223. The stock soared after the Senate passed the GENIUS Act last week — legislation that would establish a federal framework for digital tokens backed by assets such as the US dollar.
Tiger Reseach：
$Circle Internet Corp.(CRCL)$ - Regulated First-Mover with Long-Term Optionality, Near-Term Valuation Rich; Initiating at HOLD with $200 PT.
Below are some highlight point from the full report>> Please see full report for detailed analysis.
We are initiating coverage of $Circle Internet Corp.(CRCL)$ with a HOLD rating and a $200 price target. We view Circle as the first mover in regulation‑friendly stablecoins, with USDC as the leading compliant digital dollar.
Circle benefits from institutional trust, policy alignment (e.g., GENIUS Act), and strong distribution via Coinbase, banks, and developers. This gives it a solid foundation to capture outsized share as regulation advances. While crypto volatility remains, blockchain is increasingly seen as credible financial infrastructure.
We’re constructive on Circle’s broader vision—particularly in payments and financial rails—but view these as long-term bets requiring ecosystem traction and policy clarity.
At current levels, we believe much of this optionality is priced in, leaving the stock expensive at 59x '26E EBITDA.
We are not concerned with high distribution cost.
Circle’s 50% revenue-sharing with Coinbase is often flagged by investors we talked to, but we believe it’s strategically sound. Coinbase has played a pivotal role in USDC’s scale-up and liquidity, and the structure reduces Circle’s go-to-market and compliance costs. Operating leverage has supported margin expansion despite high rev share, and we expect distribution costs to decline as Circle expands into non-crypto-native channels like payments and commerce.
Interest rate is a major near-term risk.
In the near term, Circle is highly rate-sensitive, with reserve income still contributing ~95% of revenue. Fed easing under a soft landing could support crypto flows and USDC growth, offsetting yield compression. But in a hard-landing scenario, Circle faces a double hit—falling yields and declining circulation—underscoring the importance of diversifying into payments and infra.
Meaningful TAM opportunities from payment and beyond.
Circle Payments Network (CPN) marks a key growth opportunity, targeting inefficiencies in the $150T cross-border payments space. Even 1% share at a 5bp take rate could generate $750M revenue. Over time, CPN could underpin a multi-vertical, blockchain-native financial stack, with stablecoins at the core of re-architected capital markets, payments, and credit systems. While still early, Circle’s regulatory posture and tech stack offer real potential.
GENIUS Act and the digitalization of dollar.
The GENIUS Act represents a regulatory breakthrough.
Circle already meets most proposed standards—full-reserve backing, disclosures, AML/KYC—and stands to gain from rising compliance barriers.
With USDC at $61B (~28% share of $250B stablecoin market), the Act could accelerate share gains in regulated use cases. In bullish scenarios, USDC circulation could exceed $5.2T by 2035, generating >$100B in annual income.
The real threat might be from new entrants.
Long-term threats may come from traditional banks and tech giants—not from Tether. $JPMorgan Chase(JPM)$ , $Citigroup(C)$ , $Amazon.com(AMZN)$ , $PayPal(PYPL)$ and $Meta Platforms, Inc.(META)$ could issue compliant stablecoins embedded in massive existing user ecosystems. These firms have scale and use cases (remittances, payroll, e-commerce) that Circle must compete with. To maintain leadership, Circle must expand USDC beyond crypto into real-world financial and commercial applications.
Initiating with HOLD rating and $200 price target.
We use a sum-of-the-parts approach. We value the reserve income segment at $36.5B (40x 2026E EBITDA of $912M) and Circle’s emerging businesses (payments, infra, tokenized products) at $11.7B using a 15–20x EV/sales multiple on $621M of projected 2028 revenue. Combined, we arrive at a $48.2B enterprise value, or $202 per share.
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