tl;dr
USDC issuer Circle's stock rose above $236 in pre-market trading, surpassing Seaport Global's $235 price target, before settling around $228, 14% higher than its previous close. Seaport Global initiated coverage with a buy rating, calling Circle a "top-tier crypto disruptor" and predicting the stabl...
Circle's stock surged above Wall Street's $235 target in pre-market trading, driven by new coverage from Seaport Global, which assigned a buy rating and forecasted significant growth in the stablecoin market. The analyst highlighted Circle as a top-tier crypto disruptor, anticipating up to 30% revenue growth and gross margins around 40%, while cautioning that Circle’s heavy reliance on interest income presents both strength and risk.
The Senate’s approval of the GENIUS Act, a prospective federal framework for stablecoins, has heightened investor interest in Circle and Coinbase. These companies share interest earnings on $61.2 billion in stablecoin reserves, underlining the potential regulatory clarity's market impact. Reflecting this optimism, Coinbase's stock rose 3% after the vote, while Robinhood’s stock declined 2% despite hitting a 52-week high earlier and reporting strong platform asset growth.
Circle’s stock peaked above $236 pre-market before settling around $228, marking a 14% increase over the previous close. Seaport Global analyst Jeff Cantwell depicted Circle as a disruptor aiming to scale the stablecoin market from $260 billion to $2 trillion. Cantwell also emphasized that nearly all of Circle’s revenue stems from interest earned on reserve assets—a double-edged sword dependent on interest rate trends.
The GENIUS Act's Senate approval is a pivotal moment, expected to establish the first comprehensive federal stablecoin framework. Investors reacted strongly, with Coinbase climbing 3%, while Robinhood, which is less crypto-centric and not linked to stablecoins, dropped 2%, despite reporting a 10% monthly and 89% yearly increase in platform assets valued at $225 billion as of May.