3 Reasons to Hold Circle Stock Despite Its 59% Plunge in 6 Months

Core Insights - Circle Internet Group (CRCL) shares have decreased by 59.1% over the past six months, significantly underperforming the Zacks Finance sector's growth of 7.7% and the Zacks Financial-Miscellaneous Services industry's decline of 14.1% [1][2] Financial Performance - CRCL's underperformance is attributed to increased full-year 2025 operating expense guidance, regulatory uncertainty related to the GENIUS Act, execution risks with Arc, heavy investment spending, and growing competition in stablecoins [2] - In Q3 2025, USDC in circulation reached $73.7 billion, more than doubling year over year, leading to a market share increase to 29% [7] - Total revenues and reserve income rose by 66% year over year to $740 million, driven by higher average USDC balances and strong on-chain usage [7][8] - Other revenues increased to $29 million from less than $1 million in the previous year, with management raising full-year 2025 Other revenue guidance to $90-$100 million [11] Market Position and Competition - CRCL has underperformed compared to competitors like Cipher Mining (CIFR), whose shares surged by 213.7%, and Coinbase Global (COIN), which saw a decline of 28.6% [3][4] - Cipher Mining focuses on Bitcoin mining, while Coinbase Global offers crypto trading and custody services, contrasting with CRCL's focus on regulated stablecoins and blockchain-based payment infrastructure [4] Strategic Initiatives - Circle is diversifying its revenue streams beyond reserve income, with a focus on subscription, services, and transaction-based revenues [11][12] - The Arc Network is positioned as a long-term growth initiative, with a public testnet launched involving over 100 global companies [13][14] - Circle's partnerships, including a recent collaboration with Intuit, enhance the utility of USDC across various platforms [10] Earnings Outlook - The Zacks Consensus Estimate for CRCL's Q4 2025 earnings is currently at 19 cents per share, down by 4 cents over the past 30 days, with the full-year 2026 earnings estimate at 90 cents per share, a decline of 2 cents [15][16] - Technical indicators show bearish trends, with shares trading below the 50-day moving average, indicating limited near-term upside [18]