Circle Downgraded to ‘Sell’ by Compass Point After Trump Signs Stablecoin Bill
Main Idea
Analysts at Compass Point downgraded Circle (CRCL) to a 'sell' rating, citing expected competition in the stablecoin market and setting a price target of $130, a significant drop from its current value.
Key Points
1. Shares of Circle (CRCL) fell 8.23% on Tuesday to $198.31, extending a 17.47% decline over the past month from its all-time high of $298.99.
2. Compass Point analysts downgraded CRCL to 'sell' and set a price target of $130, predicting a further 34% drop due to anticipated competition in the stablecoin market.
3. The analysts expect mainstream fintechs and banks to launch competing stablecoins in the second half of 2025, leveraging wider distribution networks.
4. Circle completed its IPO in early June, raising $1.1 billion at $31 per share, with the stock nearly quadrupling on its first trading day.
5. The GENIUS Act, the first major U.S. crypto legislation, was cited as a factor in the downgrade, with analysts expecting CRCL to retrace some of its recent gains post-enactment.
Description
The analysts expect more competition from traditional financial services organizations who are diving into stablecoin initiatives amid an improved political environment for digital assets.
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