The Soaring CRCL: A Crypto Disruptor on the Rise
Circular firm on Wall Street promotes purchase of USDC issuer, Circle, causing stock surge.
In the bustling world of cryptocurrencies, Circle (CRCL) is experiencing a surge, skyrocketing 14% to an impressive $228 after market analysts at Seaport Global initiated coverage with a buy rating and a $235 price target. They've dubbed Circle as a "top-tier crypto disruptor", hoping to shake up the $260 billion stablecoin market, with predictions of it reaching a mind-boggling $2 trillion.
Pre-market trading saw Circle's stocks reaching $236, ahead of the opening bell. However, once trading commenced, the share price settled around $228. This bullish move was fueled by the Senate's passage of the GENIUS Act, a groundbreaking piece of legislation that would establish the first federal framework for dollar-pegged stablecoins.
Jeff Cantwell, Seaport Global's analyst, touted USDC, Circle's stablecoin, as inherently disruptive. "Early on, Circle's founders envisioned the development of an 'HTTP for Money', to make money more frictionless in order to help raise global economic prosperity," he said in his analysis.
Cantwell is optimistic about Circle's future, predicting annual revenue growth of up to 30% and gross margins around 40%. But he also cautions that while interest rates are beneficial right now, a fall could pose a risk, as nearly all of Circle's revenue still comes from interest earned on reserve assets.
The crypto exchange Coinbase has also been in the spotlight since the GENIUS Act's passing. This is because Circle and Coinbase share the revenue from $61.2 billion in USDC cash reserves, a lucrative arrangement that has captured investor attention. Despite an impressive 3% climb since Wednesday, Coinbase still has room to grow, with Michael Cyprys of Summit Redstone Partners setting a $90 price target.
However, trading platform Robinhood, less entwined with the crypto world and without stablecoin links, faced a rocky start on Friday, opening with a 2% drop compared to its Wednesday afternoon price. Robinhood hit a 52-week high of $77.83, but it needs to push harder to reach the more ambitious targets set by Deutsche Bank and Cantor Fitzgerald this year.
Robinhood's assets grew significantly in May, reaching $225 billion, a 10% increase from April and an 89% year-on-year hike. Yet, it has a way to go before it can breach the $90 price target set by Cyprys.
In summary, the passing of the GENIUS Act has sparked a wave of optimism in the market, with Circle leading the charge as a promising "crypto disruptor". Its revenue potential and the expanding stablecoin market paint a bright future for CRCL.
- Circle's crypto disruptor, CRCL, rose 14% to $228, aiming to disrupt the $260 billion stablecoin market, reaching a potential $2 trillion.
- Seaport Global's analyst, Jeff Cantwell, metaphorically called USDC, Circle's stablecoin, an 'HTTP for Money', envisioning it to make money more frictionless.
- Coinbase, sharing revenue from Circle's $61.2 billion in USDC cash reserves, has experienced a 3% climb since Wednesday, with a potential $90 price target.
- Despite Robinhood's assets growing significantly to $225 billion in May and hitting a 52-week high, it faces challenges to reach the more ambitious $90 price target set by Cyprys.
- The passing of the GENIUS Act, establishing the first federal framework for dollar-pegged stablecoins, has ignited optimism in the market, particularly for crypto exchanges and stablecoin issuers such as Circle.
