Wall Street goes cold on Circle, bets on its historic rally to stall

Circle’s ridiculous 597% stock rally since its IPO in early June might be on the verge of collapsing, and Wall Street is already ringing the alarm.

On Friday, President Donald Trump signed the GENIUS Act, a bill designed to regulate stablecoins like USDC, into law. The market had been expecting this, and the hype had fueled Circle’s massive run. But now that it’s signed, it’s looking like a classic case of “buy the rumor, sell the news.”

Compass Point analyst Ed Engle thinks the party is over. On Monday, he downgraded CRCL from neutral to sell, slashing the price target from $205 to $130. That’s a 40% downside from Monday’s close.

“While we expected CRCL to rally into stablecoin legislation, crypto investors typically ‘sell the news’ after highly anticipated events,” Engle said. “As such, we expect CRCL to retrace some of its recent rally after the GENIUS act was signed into law on 7/18.”

Trump signs GENIUS Act, Circle bleeds

Circle dropped hard following the news. The stock fell 2.8% to $210 in premarket trading. By the closing bell, it had lost 3.4%, ending the day at $216.10. On Friday, just hours before the bill was signed, it peaked at $262.97 before flipping direction and crashing 4.8%. At one point, it even touched $213.33. Now it’s hanging at $216, with a $53.2 billion market cap, well below its former $80 billion peak.

Engle thinks the correction isn’t just technical. He warned that Circle’s valuation is unreasonably high, especially for a company facing new regulation and increasing competition.

“We still believe USDC can be an integral part of the financial system; however, we’re more cautious towards CRCL’s long-term economics than its $53bn valuation implies,” he wrote.

According to Engle, this is just the beginning of the pressure. He believes Circle will face competitive heat from traditional fintech players and banks. These institutions are expected to enter the stablecoin game later this year, especially through white-label deals and acquisitions.

“We expect more mainstream fintechs and banks to announce competing stablecoins in 2H25, primarily through white-labeling and/or M & A.”

~ Ed Engle

Circle faces limits on growth, integration fees shrinking

Also, Circle’s revenue from blockchain integrations has likely peaked. He noted that USDC is already integrated across 24 different blockchains, and that number probably won’t grow much.

Why? Because many chains can’t afford the steep integration fees. “There are only so many chains that can afford these integration fees. As such, we expect this income stream to normalize lower in 2026 and beyond,” Engle said.

That hits one of Circle’s more unique revenue sources. If those integration payments flatten or drop, it adds even more pressure to maintain its current valuation. That could make the company lean harder on transaction volume or adoption of USDC across retail and enterprise, but neither are sure bets at the moment.

While the signing of the GENIUS Act is supposed to be a win for stablecoins, the market clearly didn’t see it as a win for Circle, at least not immediately. The irony is thick: after months of lobbying for regulation, Circle might now be facing a tighter leash, new rivals, and less runway to expand.

At the same time, Fairshake, a crypto-backed political action committee, announced it had $141 million in cash right around the same time the GENIUS vote happened. The timing isn’t a coincidence. This PAC is pouring money into pro-crypto candidates ahead of the 2026 midterms, hoping to control future regulation. So far, they’re getting a pretty good return on their investment.

Back in Washington, House leadership is planning a second vote on the bill as early as this evening, but no one’s sure if changes will be made to address concerns from holdouts.

Anyway, Circle’s surge was so obviously driven by the usual crypto rally ingredients: hype, retail FOMO, and insane speculation. But that kind of momentum doesn’t last forever, as we saw in 2021 with GameStop. And Circle isn’t the king of stablecoins. Tether still dominates with a $161.7 billion market cap, and newer players like Paxos are slowly chipping away at the pie.

So far, CRCL’s chart doesn’t inspire much confidence either. As of press time, volume’s drying up, price action is turning bearish, and indicators like RSI and OBV suggest bulls are backing off. The RSI dipped to 38, nearing oversold territory, and On-Balance Volume is sitting at just 4.71M, signaling weak buying interest. Price support is barely holding above $215.

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