Circle's Stock Takes a Hit After Trump's Crypto Law

Circle Internet Group, the company behind the popular USDC stablecoin, is navigating a complex landscape following a significant shift in the crypto world.

New Regulations and Market Impact

President Donald Trump recently signed the GENIUS Act, a law aimed at regulating stablecoins. While this is a positive development for the crypto industry, it may pose short-term challenges for Circle.

Ed Engel, an analyst from Compass Point, has downgraded Circle's stock from neutral to sell, slashing his price target from $205 to $130. He believes investors may sell their shares once the initial excitement around the new law fades.

Competition and Market Share Concerns

Despite USDC's potential to become a key part of the financial system, Engel expresses skepticism about Circle's long-term strategy. The company's stock has surged 597% since its June debut, but Engel warns of increasing competition.

Financial tech firms and banks may launch their own stablecoins by the second half of 2025, potentially eroding Circle's market share and valuation.

Integration Limits and Revenue Challenges

Engel highlights that USDC is already integrated into 24 different blockchains, limiting further expansion opportunities. This could lead to a decline in revenue from this sector, particularly in 2026 and beyond.

While USDC holds significant promise, Circle may face substantial hurdles in maintaining its growth trajectory.