TLDR
- Circle Internet Group stock has dropped roughly 40% over the past month, now trading around $76 per share
- Over 90% of Circle’s revenue comes from interest earned on cash and Treasuries backing its stablecoins, making lower interest rates a threat to earnings
- USDC circulation grew 108% year-over-year to $73.7 billion, with Circle projecting 40% annual growth long-term
- The company is building Arc and CPN payment networks to compete with Visa and Mastercard while expanding beyond just issuing USDC
- Mizuho lowered its price target on concerns about revenue expectations and rising operating expenses, while company directors sold shares
Circle Internet Group stock has taken a beating lately. The shares are down about 40% in the past month and currently sit around $76. That’s a tough pill to swallow for anyone who bought near the highs.
The company went public in June at $31 per share. Even after the recent drop, the stock still trades at more than two-and-a-half times its IPO price. But the momentum has clearly shifted.
The third quarter numbers looked solid on paper. Revenue jumped 66% year-over-year to $740 million. Adjusted EBITDA climbed from $126 million to $166 million.
But Circle also raised its operating expense guidance for the year. That announcement seems to have spooked investors. Mizuho cut its price target on the stock, pointing to concerns about revenue expectations and rising costs.
Making things worse, several company directors have been selling shares. That kind of insider activity rarely inspires confidence in the market.
The bigger problem isn’t what’s happening inside the company. It’s what’s happening with interest rates.
The Interest Rate Problem
Here’s where things get tricky. More than 90% of Circle’s revenue last quarter came from interest earned on cash and Treasuries backing its stablecoins. Lower interest rates mean lower yields, which directly hits the bottom line.
Most tech companies would love to see interest rates come down. Circle is the opposite. The market is debating when and how fast the Federal Reserve will cut rates. A December cut looks unlikely, but 2026 could bring reductions as inflation cools and unemployment stays stable.
For Circle, that’s bad news. The company’s entire business model depends on earning interest income. When rates fall, revenue falls with them.
USDC circulation reached $73.7 billion in the latest quarter. That represents 108% growth compared to a year ago. Circle expects long-term annual growth of around 40%.
The stablecoin is getting used more for cross-border payments, business-to-business transactions, and international treasury operations. It’s not just about crypto trading anymore.
Regulatory clarity has improved too. The GENIUS Act passed in July 2025, creating the first federal framework for payment stablecoins. Banks and fintech companies now have clearer rules for integrating these digital dollars into their operations.
But USDC still lags far behind Tether’s USDT in market share. The competition isn’t getting any easier.
Building New Revenue Streams
Circle is trying to evolve beyond just issuing USDC. The company is building Arc and CPN, two payment networks designed to move money faster and more efficiently.
Arc is the blockchain layer where developers can build programmable payment systems. Over 100 companies are already testing it. CPN is the off-chain network, with 29 institutions committed so far.
This puts Circle in direct competition with Visa and Mastercard. The company wants to not only issue digital currency but also control the rails that move it. If successful, Circle could collect fees on transactions flowing through its networks.
The catch is adoption. Networks only work if enough people use them. Plenty of other companies are building similar systems.
Circle also faces cyclical risk. Stablecoin demand tends to spike during crypto bull markets and fade during downturns. Coinbase stock dropped nearly 90% from late 2021 to early 2023, even after generating billions in revenue and profit.
Circle reported $1.89 billion in revenue and about $172 million in profit for the fiscal year ending March 2025. The company is smaller and likely more vulnerable to market swings.
The stock is showing bearish technical momentum right now. Analysts are mixed on the outlook. Trading volume has been elevated at over 12 million shares per day on average.
Circle stock has lost 7.97% year-to-date with a current market cap of $18.04 billion.
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