In June of last year, Circle's stock price reached $260.
On July 19th, it stopped at $62.
A drop of about 76%. This isn't a correction; it's a rewrite of the valuation framework.
Facing the camera of Fox Business, Circle President Heath Tarbert did not shy away from the numbers, choosing instead to speak measuredly: executing long-term plans like Arc well will naturally take care of the stock price. He added—"Circle is playing a long game".
This statement sounds like faith, but the market's response has been cold. Mizuho downgraded CRCL from "Neutral" to "Underperform," slashing the target price from $85 to $50, implying about 21% further downside. The reason is straightforward: even if interest rates remain high into 2027, it won't withstand the erosion of profits from pricing pressure and intensifying competition.
Retail investors are still bullish on platforms like Stocktwits, with discussion heat not low. But between sentiment and valuation, they are no longer the same thing.
Is the Moat Wide Enough
Tarbert's confidence isn't baseless. USDC's circulation is around $73 billion, covering 34 blockchains—this is a tangible scale advantage. He also made it clear: alliance models among competitors in the stablecoin space are difficult to sustain long-term.
But this statement precisely touches on a proposition the market is currently testing.
A new stablecoin, Open USD, backed by about 140 companies, has emerged with a direct strategy: attracting partners by returning reserve earnings. This is using "profit sharing" to build an ecosystem, essentially bypassing Circle's network effects, starting from partners' profit splits to sway merchants and financial institutions in choosing sides.
More noteworthy is Visa's move. The payment giant, with access to approximately 15,000 financial institutions and over 200 million merchants globally, launched the Visa Stablecoin Platform, initially supporting Open USD while continuing to be compatible with USDC and Paxos's USDG.
Circle's moat hasn't disappeared; it has shifted from "leader" to "one who needs to continuously prove their leading edge." This combination of Open USD and Visa tests not whether Circle has competitors, but how long it can maintain its lead.
Circle isn't idle either. It has already signed a memorandum of understanding with Japan's JCB to explore USDC applications in merchant payments and cross-border treasury management, including enabling overseas tourists to use stablecoins for offline payments within Japan. This is an extension from "on-chain circulation" to "offline real-world consumption scenarios," the most concrete piece of the "long-term plan" Tarbert mentioned.
The Two-Year Countdown for USDT
If Circle's problem is competition, Tether's is compliance.
With the GENIUS Act in effect for a year, USDT has roughly a two-year adjustment window. The Act requires stablecoin issuers' reserves to be fully backed and primarily invested in highly liquid assets like cash and U.S. Treasuries.
However, Tether's latest reserve disclosure shows holdings still include precious metals, loan assets, and Bitcoin. Whether these assets count under the new rules is a question.
Two years is not short, but for an issuer with an already established reserve structure, adjusting holdings isn't as simple as flipping a switch—every change to the asset structure affects the earnings model and risk exposure. If USDT still hasn't "cleaned up" its reserves to be compliant after two years, it could lose its eligibility for trading on U.S. crypto platforms.
License Bonus Period, Giants Book Early
In Hong Kong, the pace is faster.
According to market sources, Anchor Fintech, led by Standard Chartered (Hong Kong), is among the institutions that received one of the Hong Kong Monetary Authority's first batch of stablecoin issuer licenses this April. Standard Chartered and Anchor Fintech are expected to jointly announce the launch of the Hong Kong dollar-pegged stablecoin HKDAP by the end of this month at the latest.
The weight of this license lies not in the word "compliance" itself, but in whether Standard Chartered's global clearing network and commercial banking relationships can transform HKDAP from a licensed entity into a truly functional channel for moving money. The license is just an entry ticket; the real battle ahead is whether the Hong Kong dollar stablecoin can be integrated into the daily workflows of cross-border trade settlement and corporate treasury management.
The stablecoin track is shifting from "who gets the license first" to "who can turn the license into real capital flows."
Circle holds a scale advantage but faces pressure from the combined force of Open USD and Visa. Tether holds the largest global circulation but must complete a major overhaul of its reserve structure within two years. Standard Chartered and Anchor Fintech just got their license; their real test is yet to come.
Behind the 76% drop in Circle's stock price lies not just intensified competition in the stablecoin race; interest rate expectations and overall crypto market sentiment are also variables. But at least one thing is clear: as stablecoins move from "winner-takes-all" to "multi-party competition," the premium the capital market is willing to pay for scale advantage is also being recalculated. Whether execution can keep up with the speed of the narrative will be evident in two years.
*This content is for reference only and does not constitute any investment advice. The market carries risks; investment requires caution.
