Circle’s (CRCL) stock has erased nearly all of its post-IPO gains, retracing back to its opening price despite strong third-quarter earnings and accelerating USDC growth.
The sharp reversal reflects rising supply pressure, expiring lockups, and a shifting stablecoin market, all while major institutions turn increasingly bullish on Circle’s long-term moat.
Circle Round-Trips Its Entire Post-IPO Rally
Stablecoins remain one of the most promising use cases of crypto, dominated by Tether and Circle. However, the latter, Circle, is the only major issuer that allows public investors to invest, with its IPO in early June attracting an explosive volume of interest or subscription.
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Nonetheless, despite initial interest, it has wiped out all the gains. MoonRock Capital founder Simon Dedic noted that CRCL has basically round-tripped its entire run and is now back at its IPO opening price.
The crypto executive also stated that recent price-driven FUD has been amplified by macro uncertainty and the upcoming rate-cut cycle.
He also noted that today marks an unlock for early investors, meaning a significant portion of the supply could enter the market as Circle IPO investors capitulate. In his opinion, this could add short-term volatility but also create attractive entry points.
This round trip brings to mind the fact that Coinbase IPO investors recorded their first profits on July 21, 2025, nearly four years after the company went public.
Strong Q3 Results Contrast with Circle Stock Decline
While the stock retraced, Circle’s fundamentals strengthened. App Economy Insights highlighted Circle’s Q3 numbers:
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- USDC circulation up 108% YoY to $74 billion
- Revenue up 66% YoY to $740 million (a $40 million beat)
- Adjusted EBITDA up 78% YoY to $166 million
- USDC circulation still expected to grow at a 40% CAGR
Circle itself reported $9.6 trillion in on-chain volume (+680% year-over-year) and $73.7 billion in USDC circulation. This reflects the rapid global scaling of stablecoin settlement.
Against this backdrop, MoonRock Capital’s Dedic dismissed fears of earnings compression, saying that concerns leaning in this direction are misplaced.
“Seeing quite a bit of FUD from Circle investors lately, mostly driven by price action. Some are also concerned about the upcoming rate cut cycle, which could continue to pressure Circle’s earnings. That’s a mid-curved take, though imo,” he noted.
Insider Unlocks Add Sell Pressure After Early Surge
Elsewhere, Milk Road says part of Circle’s decline is structural. The stock IPO’d at $31, surged to near $240, and then pulled back once initial lockup restrictions expired, allowing insiders to sell at elevated valuations.
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Based on this, Milk Road argues that CRCL still “looks overvalued” and that the earnings beat functioned as another “sell-the-news” catalyst.
User commentary on X (formerly Twitter) also highlighted valuation tensions in the stablecoin sector. One wrote that Tether is valued at $500 billion, while Circle is valued at $20 billion, asking whether “Circle is too cheap or Tether too expensive.”
Others pointed to a massive profitability gap, with Tether producing dozens of times more net income in 2025.
“Reasonable, the net profit gap between Tether and Circle is dozens of times,” one user quipped.
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JPMorgan Flips Bullish, Citing Stablecoin Supercycle
Despite heavy price action, institutional interest is strengthening. JPMorgan upgraded CRCL from “underweight” to “overweight,” raising its price target from $94 to $100. Analysts said Circle’s Q3 beat and improving fundamentals justify a more bullish stance.
They highlighted:
- A pipeline of large partnerships tied to Circle’s Arc network, now in testnet
- Interest from firms like Deutsche Börse, Finastra, and Visa
- Potential monetization via a future Arc token
- USDC held on Circle’s platform, surging from $1.1 billion to $9.1 billion YoY
- Newly tradable 160 million shares, increasing float and short-term sell pressure
Even Cathie Wood’s Ark Invest has reportedly bought $30 million of CRCL shares.
Circle sits at the center of crypto’s most established real-world use case, yet faces immediate volatility as insiders unlock their holdings and investors reassess valuation versus competitors.
With institutional adoption accelerating and a major bank raising its target to $100, the next move for CRCL hinges on whether fresh supply is absorbed or triggers one more shakeout before the next leg of the stablecoin supercycle.