Shares in Circle Internet Group (CRCL) stock have soared in value since the stablecoin issuer went public on the US stock market. The stock has surged amid institutional and investor hype, especially following the US Senate’s landmark approval of the GENIUS Act stablecoin bill. The stablecoin regulation bill mandates $1 reserves for every $1 of stablecoins and compliance with anti-money-laundering rules. Circle is one of the biggest issuers of stablecoins in the United States, so the Senate approval was a huge win for the company.
However, there are certainly some investors who see Circle’s meteoric rise on the market as a flash in the pan. Following its IPO rally, several institutions, such as Ark Invest, dumped their shares before the stock saw a slight decline. This could be a sign that there isn’t full belief in Circle stock as an investment quite yet, which could send shares plummeting back down. Circle (CRCL) has already seen a correction since its high last week, now sitting at $200. The stock has fallen an additional 9% already this Wednesday.
Analysts at Jeffries aren’t convinced that Circle (CRCL) stock’s rally is more than a hype cycle. In a recent note, analyst Trevor Williams argued that U.S. consumers still prefer the current card-based system, which is fast, secure, and packed with perks. Others note Circle’s sky-high valuation, now trading near 180x earnings, and warn of risks tied to its thin 25% free float. RIA Advisors’ Michael Lebowitz also sees Circle’s role more like a money market proxy for crypto traders than a serious challenger to Visa or Mastercard.
Also Read: Ark Invest Dumps $110 Million Circle Stock After 600% IPO Rally
Despite the growth of the cryptocurrency sector over the past year, some critics remain concerned about investments like CRCL. However, recent regulatory changes and restrictions on crypto being eased signal promise. The current US President preached support of the crypto industry in his campaign, and has since put forth several initiatives to adopt cryptocurrency as a supportive hedge for the US dollar. Bitcoin and other crypto assets have gone up in value since last November, with BTC notably reaching a new ATH of $111,000 this year. The creation of a crypto task force and proposed crypto stockpile held by the US Treasury also has supporters of the industry bullish about its future.
For now, Circle (CRLC) stock is proof that the US stock market is willing to acknowledge the growing relevance of crypto companies. If the GENIUS Act passes the House, Circle (CRCL) could see another big rally too. President Trump will most likely sign the bill when presented to him. Trump has been very vocal about his support for the crypto industry. Trump and pro-crypto SEC head Paul Atkins could together make the crypto environment in the US bloom over the coming years.
