Should you buy circle stock just as Trump signs the law to act of genius?
Coinwire Japan by Stablecoins by Unsplash
Recently listed, Circle Financial (CRCL) is gradually gaining a reputation as Nvidia (NVDA) in the crypto industry. The hype around USDC Stablecoin publishers is authentic. Since the list, the stock has risen by more than 500%.
www.barchart.com
The Genius Act or “Guard Railing Emerging and New Instruments Using Stubcoins” Act is a federal law passed in July 2025. Under this Act, only federally approved, properly capitalized institutions (such as banks and regulated fintechs) can issue stable states, and issuers must hold a one-to-one equivalent reserve, primarily cash or in the Department of Short Terms.
This makes investments in CRCL stocks even more attractive as they act as a regulatory stamp for tailwinds and stubcoin approvals. However, the massive rise in stocks has raised valuation concerns.
Goldman Sachs has a price target of $83 and says it has “appealing to see CRCL’s business and growth, but its valuation is rising,” meaning it has dropped 57% from its current level. Meanwhile, an analyst at Oppenheimer commented that there was a “very favorable view” of the circle and its business, without providing a price target. However, he cited a punchy rating and advised that “Investors will wait for a better entry point.”
Interestingly, JPMorgan, which is also moving in the Stablecoin space, has announced a “underweight” rating for CRCL stock with a price target of $80. Their concerns were along similar lines.
So, what should I do with my club now? Let’s take a closer look.
In a recent article, I outlined the cases of bulls and bears in the circle here.
Essentially, Circle acts not as a traditional financial institution, but as the leading infrastructure provider in the evolving digital finance ecosystem. Instead of directly processing FIAT transactions, they rely on regulated bank partners to move funds. Therefore, the core responsibility of the circle is focused on issuing digital dollars and solving them safely.
This allows circles to operate with flexibility and reduce exposure to bank-specific regulatory burdens. As a result, the company is positioned as a bridge between traditional financial systems and a blockchain-based future.
Meanwhile, with recent developments, circles have begun to expand beyond mere stablecoin publications. Earlier this year, the acquisition of Hasnote launched USYC, a tokenized version of the US Treasury Money Market Fund. This step marks the company’s entry into the broader tokenized asset space, an industry with long-term potential.
However, changes in regulations have created options for the company. The Genius Act supports Stablecoin Frameworks, but imposes strict guidelines on preliminary structures and limits them to cash, demand deposits, or the short-term finance ministry. This limits the types of assets a circle can hold, reducing the flexibility in yield generation and risk management.
Another factor to consider is Circle’s revenue sharing agreement with Coinbase (Coin). Although it has contributed to expanding USDC reach, this arrangement introduces repeated costs. Notably, all new distribution partners will be added to Circle’s payment obligations and can consider future profitability.
Finally, the evaluation remains a concern. The circle trades at a forward price return of 154 times and a price-to-sales ratio of 23.8 times. This is well above the industry averages each. It’s 23.97 times and 3.17 times, respectively. Multiples of these heights suggest that much of the company’s long-term growth is already priced and there is little room for failure.
The circle’s financial stories of the past few years tell an impressive story of change. In 2022, it was still red, bringing in $772 million revenues, but ended the year with a substantial net loss of $768.8 million. Since then, things have been turning back. By the end of 2024, revenue had skyrocketed to $1.7 billion, and the company had now reported profits of $155.7 million.
Cash flow went on a similar path. In 2022 there was negative cash flow from operations of $72.7 million. Two years later, the company was generating cash flow instead from its $344.6 million operation.
Meanwhile, Circle’s cash reserves have also been strengthened. The company’s cash position has almost doubled by the end of 2024, starting from around $369 million at the end of 2023.
Overall, analysts attribute a “moderate purchase” rating of CRCL stocks with an average target price of $184.67, which has already been exceeded. The high target price of $280 indicates an upside potential of around 50% from the current level.
Of the 14 analysts covering stocks, six have a “strong buy” rating, one has a “Mdoerate Buy” rating, four have a “hold” rating, and three have a “strong sell” rating.
www.barchart.com
On the date of publication, Pathikrit Bose had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published barchart.com
