Circle gets buy rating after Senate passes stablecoin bill

[NEW YORK] Circle Internet Group’s shares jumped 20 per cent on Friday (Jun 20) after Seaport Global gave the stablecoin issuer its first buy rating in the wake of the US Senate’s move this week to pass legislation setting up regulatory rules for cryptocurrencies pegged to the US dollar.

The company behind USDC, the second-largest stablecoin by market share, has seen its shares rise more than 600 per cent since they started trading earlier this month.

Optimism around stablecoin regulations has driven the strength. Seaport analyst Jeff Cantwell sees the global stablecoin market having the potential to reach US$2 trillion at some point, from about US$260 billion now. That would translate into annual revenue growth of 25 to 30 per cent for Circle, he wrote in a note to clients on Friday.

“We view Circle as a top-tier crypto ‘disruptor’ with a sizeable future opportunity,” Cantwell wrote.

Seagate assigned a US$235 price target to the stock, not far above its Friday high of US$233.

The Senate move was a win for the crypto industry and for US President Donald Trump, who has called on the House to pass the measure as well. A Trump-affiliated stablecoin with World Liberty Financial already has a roughly US$2 billion market value.

Stablecoin regulations are expected to help drive further adoption and institutional investment for issuers such as Circle. Cantwell sees scope for the company to generate US$3.5 billion in revenue next year, compared with US$1.68 billion for 2024.

Circle said in April that it was launching a payments network to help financial institutions settle cross-border transactions in stablecoins. Cantwell sees this as a potential catalyst for the company, saying that it would add to its momentum and help drive growth.

Also this month, Shopify said it will roll out USDC payments for its merchants and customers globally.

Cantwell sees Circle competing with payment companies such as Visa and Mastercard, which have seen their stocks decline since the Senate passed stablecoin legislation.

Circle now has one buy rating, one hold and no sell calls among analysts tracked by Bloomberg. BLOOMBERG