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Circle Internet Drops 13% in a Week: Buy, Sell or Hold the Stock?
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Key Takeaways
CRCL shares fell 13.3% in a week after announcing a 10M share public offering.
USDC in circulation surged 90% year over year, hitting $65.2B by Aug. 10, 2025.
CRCL revenues jumped 53% in Q2, driven by stablecoin adoption and reserve income.
Circle Internet Group (CRCL - Free Report) shares have dropped 13.3% in the past week, underperforming both the Zacks Financial-Miscellaneous Services industry and the Zacks Finance sector. While the industry has fallen 0.7%, the broader sector has risen 0.1% over the same timeframe.
The underperformance in CRCL shares can be attributed to increasing concern over its prospects. Following the second-quarter results, the stablecoin provider announced a public offering of 10 million shares of its Class A common stock at a price of $130 per share. It is notable that out of 10 million shares, Circle Internet’s existing stockholders are offering 8 million, reflecting some profit-taking that has spooked investors about the growth prospects over the long term.
How should investors approach CRCL stock? Let us dig deep to find out.
CRCL Beats Industry, Peers Since Listing
Since the closing of the initial public offering on June 4, CRCL shares have returned a whopping 70.1%, outperforming peers, including Coinbase (COIN - Free Report) , PayPal (PYPL - Free Report) and Fiserv (FI - Free Report) . While Coinbase shares have returned 25.2%, PayPal and Fiserv shares have lost 4.4% and 16.6%, respectively.
CRCL Stock’s Performance
Image Source: Zacks Investment Research
Circle Internet shares are overvalued, as suggested by the Value Score of F. In terms of forward 12-month price/sales (P/S), CRCL shares are currently trading at 11.14X, much higher than the industry’s 3.38X.
Circle Internet offers USDC stablecoin, which is redeemable on a one-for-one basis for U.S. dollars and is backed by reserves consisting of highly liquid, price-stable cash and cash equivalents. USDC in circulation grew 90% year over year to $61.3 billion at the second-quarter end, and has grown an additional 6.4% to $65.2 billion as of Aug. 10, 2025. Average USDC in circulation surged 86% year over year to $61 billion. In the second quarter of 2025, USDC onchain transaction volume grew 5.4 times year over year to nearly $6 trillion, reflecting growing usage.
An improving regulatory environment, including the passage of the GENIUS Act on July 18, provides a legal background to stablecoins like USDC, paving the way for more enterprise adoption. This bodes well for Circle Internet, which has minted USDC worth $42.2 billion, up 21% year over year, in second-quarter 2025. The company redeemed USDC worth $40.8 billion, up 17% year over year. Meaningful wallets, defined as wallets holding more than $10 of USDC, surged 68% year over year as USDC adoption continues to expand globally.
The growing adoption of Circle Internet’s stablecoin network drove total revenues and reserve income by 53% year over year to $658.1 million. The top line beat the Zacks Consensus Estimate by 1.97%. CRCL’s revenues less distribution costs (RLDC) jumped 38% year over year to $251 million. However, the RLDC margin contracted 408 basis points (bps) year over year to 38%. Circle Internet expects the 2025 RLDC margin to be 36-38%.
Platform Expansion, Rich Partner Base Aids CRCL’s Prospects
The company launched Circle Payments Network in May, a platform for financial institutions to use stablecoins for payments, with more than 100 institutions in the pipeline. Currently, Hong Kong, Brazil, Nigeria and Mexico are the active payment corridors.
Circle Gateway, introduced in July, enables seamless cross-chain USDC usage and is currently supported by eight new blockchain partners. Circle Internet also introduced Arc, an open Layer-1 blockchain purpose-built for stablecoin finance and compatible with Ethereum infrastructure.
An expanding partner base that includes the likes of Binance, Corpay, FIS, Fiserv and OKX is noteworthy. Circle Internet now offers a yield token, USYC, which can be used in both digital assets and traditional capital markets as collateral with anytime liquidity between USYC and USDC. The company’s expanded partnership with Binance now makes USYC available as collateral, thereby accelerating adoption.
Earnings Estimates Revision Shows Steady Trend for CRCL
For third-quarter 2025, the Zacks Consensus Estimate for Circle Internet’s earnings has been unchanged at 19 cents per share over the past 30 days. The consensus mark for revenues is pegged at $661.4 million.
For 2025, the Zacks Consensus Estimate for CRCL’s earnings has been unchanged at $1.10 per share over the past 30 days. The consensus mark for 2025 revenues is pegged at $2.55 billion.
Here is Why CRCL is a Hold Now
Improving regulatory environment and growing demand for stablecoins like USDC bode well for the company’s long-term prospects. Hence, investors currently having a long position should continue to stay put.
However, a stretched valuation and stiff competition from the likes of well-established players like Coinbase, PayPal and Fiserv make the CRCL stock a risky bet in the near term. Coinbase has inked a deal with Shopify that will allow consumers to pay with USDC on Base (Coinbase Ethereum layer-2 network) through Shopify Payments, bringing onchain payments to millions of storefronts. Meanwhile, Fiserv’s plan to roll out a blockchain-based digital asset platform based on a U.S. dollar-pegged stablecoin called FIUSD has been a noteworthy development.
Circle Internet’s investments in building platform, capabilities and partnerships are expected to hike operating expenses, currently expected between $475 million and $490 million for 2025, implying a 20-24% growth rate. This is expected to keep margins under pressure in the near term.
Image: Bigstock
Circle Internet Drops 13% in a Week: Buy, Sell or Hold the Stock?
Key Takeaways
Circle Internet Group (CRCL - Free Report) shares have dropped 13.3% in the past week, underperforming both the Zacks Financial-Miscellaneous Services industry and the Zacks Finance sector. While the industry has fallen 0.7%, the broader sector has risen 0.1% over the same timeframe.
The underperformance in CRCL shares can be attributed to increasing concern over its prospects. Following the second-quarter results, the stablecoin provider announced a public offering of 10 million shares of its Class A common stock at a price of $130 per share. It is notable that out of 10 million shares, Circle Internet’s existing stockholders are offering 8 million, reflecting some profit-taking that has spooked investors about the growth prospects over the long term.
How should investors approach CRCL stock? Let us dig deep to find out.
CRCL Beats Industry, Peers Since Listing
Since the closing of the initial public offering on June 4, CRCL shares have returned a whopping 70.1%, outperforming peers, including Coinbase (COIN - Free Report) , PayPal (PYPL - Free Report) and Fiserv (FI - Free Report) . While Coinbase shares have returned 25.2%, PayPal and Fiserv shares have lost 4.4% and 16.6%, respectively.
CRCL Stock’s Performance
Image Source: Zacks Investment Research
Circle Internet shares are overvalued, as suggested by the Value Score of F. In terms of forward 12-month price/sales (P/S), CRCL shares are currently trading at 11.14X, much higher than the industry’s 3.38X.
CRCL Stock’s Valuation
Image Source: Zacks Investment Research
CRCL’s Q2 Results Reflect Growing Stablecoin Usage
Circle Internet offers USDC stablecoin, which is redeemable on a one-for-one basis for U.S. dollars and is backed by reserves consisting of highly liquid, price-stable cash and cash equivalents. USDC in circulation grew 90% year over year to $61.3 billion at the second-quarter end, and has grown an additional 6.4% to $65.2 billion as of Aug. 10, 2025. Average USDC in circulation surged 86% year over year to $61 billion. In the second quarter of 2025, USDC onchain transaction volume grew 5.4 times year over year to nearly $6 trillion, reflecting growing usage.
An improving regulatory environment, including the passage of the GENIUS Act on July 18, provides a legal background to stablecoins like USDC, paving the way for more enterprise adoption. This bodes well for Circle Internet, which has minted USDC worth $42.2 billion, up 21% year over year, in second-quarter 2025. The company redeemed USDC worth $40.8 billion, up 17% year over year. Meaningful wallets, defined as wallets holding more than $10 of USDC, surged 68% year over year as USDC adoption continues to expand globally.
The growing adoption of Circle Internet’s stablecoin network drove total revenues and reserve income by 53% year over year to $658.1 million. The top line beat the Zacks Consensus Estimate by 1.97%. CRCL’s revenues less distribution costs (RLDC) jumped 38% year over year to $251 million. However, the RLDC margin contracted 408 basis points (bps) year over year to 38%. Circle Internet expects the 2025 RLDC margin to be 36-38%.
Platform Expansion, Rich Partner Base Aids CRCL’s Prospects
The company launched Circle Payments Network in May, a platform for financial institutions to use stablecoins for payments, with more than 100 institutions in the pipeline. Currently, Hong Kong, Brazil, Nigeria and Mexico are the active payment corridors.
Circle Gateway, introduced in July, enables seamless cross-chain USDC usage and is currently supported by eight new blockchain partners. Circle Internet also introduced Arc, an open Layer-1 blockchain purpose-built for stablecoin finance and compatible with Ethereum infrastructure.
An expanding partner base that includes the likes of Binance, Corpay, FIS, Fiserv and OKX is noteworthy. Circle Internet now offers a yield token, USYC, which can be used in both digital assets and traditional capital markets as collateral with anytime liquidity between USYC and USDC. The company’s expanded partnership with Binance now makes USYC available as collateral, thereby accelerating adoption.
Earnings Estimates Revision Shows Steady Trend for CRCL
For third-quarter 2025, the Zacks Consensus Estimate for Circle Internet’s earnings has been unchanged at 19 cents per share over the past 30 days. The consensus mark for revenues is pegged at $661.4 million.
Circle Internet Group, Inc. Price and Consensus
Circle Internet Group, Inc. price-consensus-chart | Circle Internet Group, Inc. Quote
For 2025, the Zacks Consensus Estimate for CRCL’s earnings has been unchanged at $1.10 per share over the past 30 days. The consensus mark for 2025 revenues is pegged at $2.55 billion.
Here is Why CRCL is a Hold Now
Improving regulatory environment and growing demand for stablecoins like USDC bode well for the company’s long-term prospects. Hence, investors currently having a long position should continue to stay put.
However, a stretched valuation and stiff competition from the likes of well-established players like Coinbase, PayPal and Fiserv make the CRCL stock a risky bet in the near term. Coinbase has inked a deal with Shopify that will allow consumers to pay with USDC on Base (Coinbase Ethereum layer-2 network) through Shopify Payments, bringing onchain payments to millions of storefronts. Meanwhile, Fiserv’s plan to roll out a blockchain-based digital asset platform based on a U.S. dollar-pegged stablecoin called FIUSD has been a noteworthy development.
Circle Internet’s investments in building platform, capabilities and partnerships are expected to hike operating expenses, currently expected between $475 million and $490 million for 2025, implying a 20-24% growth rate. This is expected to keep margins under pressure in the near term.
Circle Internet currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.