TLDR
- TD Cowen reiterated a Buy rating on CRCL and raised its price target to $92 from $87
- Circle stock fell 6.8% after the U.S. Senate failed to advance the CLARITY Act
- The Fed’s 25-basis-point rate hike could boost Circle’s reserve income from USDC backing
- Circle launched Arc’s public mainnet on September 16 with 100+ institutional participants
- CRCL has a Moderate Buy consensus on TipRanks with an average price target of $101.53
Circle Internet Group (CRCL) took a hit this week, falling 6.8% on Wednesday after the U.S. Senate failed to advance the CLARITY Act. The proposed digital assets framework fell short of the 60 votes needed to move forward.
Despite the drop, TD Cowen analyst Bryan Bergin kept his Buy rating on the stock and lifted his price target to $92 from $87. He cited improving reserve economics and Circle’s expanding blockchain infrastructure as the main reasons.
Earlier this month, CRCL also fell 11.6% to $86.10 following a quarterly earnings miss. The company reported $0.18 earnings per share against a consensus estimate of $0.26. Revenue came in at $701.32 million, up 6.6% year over year.
Bergin pointed to three key developments in his latest note: the Arc mainnet launch, the Fed’s rate decision, and the CLARITY Act vote. He views all three as relevant to Circle’s near-term outlook.
Arc Mainnet Goes Live
Circle launched Arc’s public mainnet on September 16. More than 100 institutional and ecosystem builders participated at launch. The blockchain is built to support financial markets and real-time money movement.
Bergin sees Arc as a way for Circle to build revenue beyond its core reserve income. That diversification could matter more as the company looks to expand past its stablecoin business.
The Federal Reserve also raised its benchmark rate by 25 basis points to a range of 3.75% to 4.00%. Because Circle earns income on assets backing USDC, higher rates can lift the income it generates from reserves.
CLARITY Act Setback
The failed CLARITY Act vote was a setback, but TD Cowen’s Jaret Seiberg expects the SEC and CFTC to step up and provide greater clarity for crypto companies. That could still support institutional stablecoin adoption.
TD Cowen’s Lance Vitanza also pointed to the SEC’s proposed Regulation Crypto Assets framework as another potential path forward for the industry.
The GENIUS Act has already established a federal stablecoin framework. Circle has secured federal and state trust approvals and expanded its international licensing.
Bergin also flagged potential monetization opportunities across CPN, CCTP, StableFX, and Arc as additional growth avenues beyond USDC.
On the institutional side, California State Teachers Retirement System increased its Circle stake by 3,456.8% in Q2, adding 215,255 units to end the quarter with 221,482 worth roughly $13.9 million.
Insider activity leaned toward selling. CEO Jeremy Allaire sold 56,200 units at an average price of $98.04 on September 8, totaling $5.5 million. The sale was made under a pre-arranged Rule 10b5-1 plan.
Over the past quarter, insiders sold a combined 1,018,123 units worth $75.7 million. Insiders currently own 10.85% of the company.
On TipRanks, CRCL holds a Moderate Buy consensus based on 13 Buys, six Holds, and three Sells. The average price target of $101.53 implies 26.2% upside from current levels. Year-to-date, the stock has gained 1.5%.
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