Circle Internet stock price surged on its first trading day as a publicly traded company. CIRCL shares jumped to a high of $83, transforming it into a $18 billion company and one of the best initial public offerings (IPO) this year. This article explores whether Circle stock is a good buy today.
The bullish case for Circle stock price
Circle is a fintech company that runs the second-biggest stablecoin in the crypto industry. USDC, its stablecoin, has a market capitalization of over $60 billion and is the second-biggest name after Tether.
Stablecoin issuers have one of the best business models. In it, users exchange their real money for a digital token, which they can send to other people or use in decentralized finance (DeFi).
The company then takes the money and invests it in liquid assets like money market funds, earning the extra return. As a result, it operates largely as a bank without having to follow the strict laws that banks face.
The GENIUS Act in the United States confirmed that these companies will operate at a lower bar than banks. All they need to do is to ensure that funds are stored in the US and invested in highly liquid assets.
USDC is highly regulated
The other bullish case for USDC is that it is one of the most regulated stablecoins in the industry. It is regulated in the United States, the European Union, the UK, and other countries, meaning that it will likely gain market share in the future.
For example, USDC stands to gain when Tether’s USDT is delisted in Europe because it has skipped MiCA registration.
The other bullish fact is that Circle’s business is still growing. Its S1 filing showed that it made $1.6 billion in 2024, up from $1.45 billion a year earlier and $772 million in 2022. It made $578 million in the first quarter and a net profit of over $62 million.
This growth will likely accelerate as analysts predict that the stablecoin industry is just starting to grow. In a recent report, Visa noted that the amount of money in stablecoins will jump to over $3 trillion by 2030, while Citi sees the figure jumping to $1.6 trillion.
This growth will likely benefit Circle because it has the second-biggest market share in the industry.
Circle has other areas to grow. For example, it already runs EURC, a stablecoin backed by the euro that has over $200 million in assets. It has a chance to launch stablecoins of other currencies.
It also runs the USYC fund, a tokenized money market fund that is slowly gaining traction. The Circle Payment Network is growing as it seeks to disrupt an industry dominated by Swift.
Circle stock price has risks
There are risks for investing in the Circle stock today. First, historically, stocks that pop on the first day often go through a cooldown period as the momentum fades. In most cases, as we saw with Coreweave stock, buying the initial dip is usually one of the best approaches.
Second, the actions of the Federal Reserve will likely affect the company. Interest rate cuts by the Fed will lower the money it makes from investing in treasuries. As such, the company will need to grow its ‘other’ income over time.
Further, the stablecoin industry is set to become more competitive. PayPal has already launched its PYUSD, while Ripple Labs launched its RLUSD stablecoin. US banks are considering launching their coins, while Santander wants to do the same. Therefore, the rising competition may derail its growth in the future.
Is CRCL stock a good buy today?
Circle shares popped on the first day of trading as investors bought the operator of the second-biggest stablecoin in the industry. The company will likely do well in the next decade as stablecoins become mainstream.
My expectation is that the Circle stock price will rise a bit, potentially to $100, and then it will retreat as the hype eases. A
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