Citizens Rates Circle Market Perform, Citing Stablecoin Growth and Valuation
U.S. bank Citizens initiated coverage on Circle Internet (CRCL) with a "market perform" rating, indicating that much of the valuation upside is already accounted for.
Circle issues stablecoins like USDC and EURC and has developed a comprehensive infrastructure, including a payments network and cross-chain protocol.
The company is developing Arc, a layer-1 blockchain aimed at enhancing programmable money in various financial applications.
Stablecoins are pegged to real-world assets and are crucial for transferring money and cross-border payments.
Analysts predict the stablecoin market cap could rise from $300 billion to $3 trillion by 2030, driven by regulatory clarity from initiatives like the U.S. GENIUS Act and Europe’s MiCA.
USDC's circulation has doubled year-over-year to approximately $74 billion, backed by cash and treasuries.
Circle boasts over $1 billion in cash post-IPO, allowing for investments and acquisitions, but its current stock valuation limits further upside without increased adoption or monetization.
Key areas of focus include USDC growth, margins, fee revenue, and yield sensitivity, alongside developments like new payment corridors, enterprise partnerships, and Arc’s testnet.
Circle's shares rose to about $134.40 in early trading.
