TLDR
- Circle Internet Group (CRCL) jumped 17.6% Thursday to $133.70, driven by strong USDC stablecoin demand and regulatory support
- USDC circulation reached $72 billion, more than doubling year-over-year and exceeding analyst forecasts
- The GENIUS Act now treats compliant stablecoins like USDC as equivalent to cash in the U.S. financial system
- Fed rate cut expectations boosted crypto-related stocks as lower rates typically drive investment into riskier assets
- Analysts maintain mixed views with Hold rating, though some see upside potential to $230 price targets
Circle Internet Group shares rocketed 17.6% Thursday, closing at $133.70 as investors piled into the stablecoin issuer. The stock has now gained 24.1% year-to-date since its June IPO debut.
The rally came as broader markets posted modest gains. The S&P 500 rose 0.8% while the Nasdaq added 0.7%.
Two key factors drove Circle’s surge. First, strong demand for its USDC stablecoin continues to outpace Wall Street expectations.
Canaccord Genuity analyst Joseph Vafi noted USDC circulation hit $72 billion. That represents more than double the year-ago level and a 16% jump quarter-to-date.
The five-star analyst said USDC adoption is happening faster than expected. He linked the growth to increased digital asset activity and broader crypto market usage.
Regulatory Win Boosts Confidence
The second catalyst was the recent passage of the GENIUS Act. This new law gives compliant stablecoins like USDC the same legal standing as cash in the U.S. financial system.
TD Cowen analyst James Marple said stablecoins now have mainstream acceptance. He highlighted their potential for cross-border transactions through faster, cheaper, and more reliable payments.
The law requires U.S. stablecoins to be fully backed by safe, liquid assets. It also mandates strict audits to maintain compliance.
This regulatory framework should help rebuild trust after past sector failures. Circle appears well-positioned to benefit from these new rules.
Fed Data Sparks Crypto Rally
Thursday’s gains also reflected broader crypto optimism tied to Federal Reserve policy. The morning brought conflicting economic data that ultimately favored rate cut expectations.
August’s Consumer Price Index showed inflation running hotter than expected. However, weekly unemployment claims jumped to their highest level since October 2021.
The mixed signals put Fed Chair Powell in a tough spot. But markets now expect the central bank to prioritize employment concerns and cut rates next week.
Competition Concerns Dismissed
Bernstein analyst Gautam Chhugani recently maintained his Outperform rating with a $230 price target. He acknowledged chatter about potential competition from new stablecoins on Hyperliquid exchange.
But Chhugani dismissed these threats as limited. He noted USDC remains the only stablecoin accepted on Hyperliquid’s main futures platform.
Building liquidity for new competitors will take considerable time. Circle’s market position appears well-defended as USDC adoption continues expanding.
Analyst Views Mixed
Wall Street remains divided on Circle’s prospects. The stock carries a Hold consensus rating from 16 analysts over the past three months.
Six analysts rate it a Buy while six say Hold. Four recommend selling the shares.
The average 12-month price target sits at $175.67. That implies 31.4% upside from current levels, though some analysts question the stock’s high valuation with a forward P/E ratio above 120.
USDC circulation data shows the stablecoin market continues growing faster than many expected, with Circle capturing strong demand for its regulated digital dollar alternative.
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