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Circle Drops 30% in a Month: Should You Still Hold the CRCL Shares?

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Key Takeaways

  • CRCL shares sank 30.3% in a month, underperforming the industry, sector and peers.
  • USDC circulation grew 90% year over year, with Q2 onchain volume hitting nearly $6 trillion.
  • New launches like Circle Payments Network and Arc expand CRCL's reach and partner base.

Circle Internet Group (CRCL - Free Report) shares have dropped 30.3% in the past month, underperforming both the Zacks Financial-Miscellaneous Services industry and the Zacks Finance sector. While the industry has declined 1.7%, the broader sector has risen 1.3% over the same timeframe. CRCL shares have also underperformed peers, including Coinbase (COIN - Free Report) , PayPal (PYPL - Free Report) and Robinhood (HOOD - Free Report) . While Robinhood shares have returned 2.9%, PayPal and Coinbase shares have lost 3.4% and 2.3%, respectively, over the past 30 days.

The underperformance in CRCL shares can be attributed to increasing concern over its prospects amid rising competition from Coinbase, PayPal and Robinhood. Coinbase has inked a deal with Shopify that will allow consumers to pay with USDC on Base (Coinbase’s Ethereum layer-2 network) through Shopify Payments, bringing onchain payments to millions of storefronts. PayPal offers PayPal USD (PYUSD) while Robinhood is part of a coalition that has launched a stablecoin called USDG.

CRCL Stock’s Performance

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Circle shares are overvalued, as suggested by the Value Score of F. 

The CRCL shares are also trading below the 50-day moving average, indicating a bearish trend.

CRCL Trades Below 50-Day SMA

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

So, how should investors approach CRCL stock? Let us dig deep to find out.

Growing Stablecoin Usage Bodes Well for CRCL’s Prospects

Circle 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, provides a legal background to stablecoins like USDC, paving the way for more enterprise adoption. This bodes well for Circle, which has minted USDC worth $42.2 billion, up 21% year over year, in the second quarter of 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’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 year over year to 38%. Circle 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 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, OKX, Finastra, and Fireblocks is noteworthy. Circle recently inked a partnership with Fireblocks under which the former’s stablecoin network will complement Fireblocks’ custody and payments infrastructure tools to provide cross-border treasury and tokenization asset settlement. The partnership with Finastra now enables banks to integrate USDC settlement into cross-border payment flows. FIS and Circle are enabling U.S. financial institutions to offer their customers the option to make domestic and cross-border stablecoin payments using USDC.

Circle 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’s earnings has been unchanged at 19 cents per share over the past 30 days. The consensus mark for revenues is pegged at $668.7 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 $2.58 billion.

Here is Why CRCL is a Hold Now

Improving regulatory environment and growing demand for stablecoins like USDC bode well for Circle’s long-term prospects. Hence, investors currently holding a long position should continue to stay invested.

However, a stretched valuation and stiff competition make the CRCL stock a risky bet in the near term. Circle’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.

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