logo

The first stablecoin issuer Circle is quickly plummeting back to its opening price. What is the market worried about?

By: blockbeats|2025/11/14 13:00:01
0
Share
copy
Original Author: Rubin, Top Influencer in the Knowledge Power List for Economics and Management

Editor's Note: This article is excerpted from a roundtable event on "Penetrating Stablecoins" jointly hosted by Zhihu and BlockBeats. The roundtable has accumulated over 26 million views since its launch, attracting widespread attention from both within and outside the industry. The event aims to present the latest developments, key mechanisms, and future trends of stablecoins to the public in a more intuitive and systematic manner.

Roundtable Link: https://www.zhihu.com/roundtable/stablecoin

The following is the original content:

Circle this quarter seems like a pig flying high on the high-interest rate trend, but the market is worried the wind direction may change:

Narrowing spreads, rising costs, single-profit business, regulatory uncertainty;

With these headwinds, companies flying high may also be prone to quick falls.

The first stablecoin issuer Circle is quickly plummeting back to its opening price. What is the market worried about?

Imagine the stock market as a "marathon-style gamble," where yesterday player Circle rushed through a mid-race aid station (Q3) and achieved a good profit result. However, after investors reviewed the report, they believed that the upcoming slope, player pace, and aid may not be sustainable, leading to selling and causing a price drop.

1) Investors Focus More on the "Future"

Although Circle significantly exceeded expectations in Q3, it also raised its full-year operating expense forecast ($495–510M). This implies that the company's future profit growth rate may be "eaten up," making it unable to achieve high profits again.

2) Reserve Yield Declining

Companies like Circle, which operate stablecoins, make a significant portion of their earnings through:

Issuing stablecoins, users buying stablecoins, and the company receiving dollars to purchase conservative asset investments such as government bonds/short-term notes

Take the spread without paying interest through this method.

A report shows that although the total amount of reserve income is large, the reserve's simple interest return has decreased by approximately 96 bps.

If market interest rates decline or short-term yields compress, this profit-making method will significantly shrink in the future, directly impacting earnings.

3) Income Highly Relies on "Reserve Income"

Out of Q3's $740M, the vast majority comes from reserve income ($711M), while "other income" (subscriptions, services, transactions, etc.) is only $29M.

This means that Circle's current business is more like a large treasury that doesn't need to pay interest to users, rather than a traditional SaaS or payment company;

When the market is concerned about narrowing spreads or regulatory impact, this single-income model will be discounted.

4) Regulatory and Policy Risks

Stablecoins are closely related to reserve assets, and any regulation (such as strict rules from the U.S. Congress/regulators on stablecoins) or on reserve assets (such as restrictions on holding government bonds/short-term notes) will affect revenue expectations.

During regulatory uncertainty, investors often demand a higher risk premium, leading to sell-offs and stock price declines.

In fact, Circle is currently in a delicate stage:

Its profit model is sound, its compliance foundation is solid, but the growth story is losing momentum.

Perhaps in the eyes of many traditional investors, it is more like a "dollar fund company," making safe but unimaginative money.

Original Article Link

-- Price

--

You may also like

Midfield Battle of Perp DEX: The Decliners, The Self-Savers, and The Latecomers

Hyperliquid has captured this wave of geopolitical market trends with commodity contracts. Decentralized exchanges are moving from internal competition within the crypto industry to a genuine alternative to traditional financial infrastructure, and this direction has only just begun.

Iran War Stalemate: What Signal Should the Market Follow?

Watch the Bond Market

Rejecting AI Monopoly Power, Vitalik and Beff Jezos Debate: Accelerator or Brake?

Can technological advancement be guided, or has it already gone beyond our control?

Insider Trading Alert! Will Trump Call a Truce by End of April?

Multiple Accounts Accurately Predict War, Earn $1.8 Million

After establishing itself as the top tokenized stock, does Ondo have any new highlights?

The total market capitalization of the global stock market is about $150 trillion, while the tokenized stocks market is currently only $10 billion in size, making it akin to a nascent super market that has just cracked the door open.

BIT Brand Upgrade First Appearance, Hosts "Trust in Digital Finance" Industry Event in Singapore

Discussing topics such as governance standards, compliance frameworks, and operational infrastructure within the context of the institutionalization process

Popular coins

Latest Crypto News

21:42

Yili Hua: The cryptocurrency market has been disappointing over the past four years and lacks disruptive innovation

Yili Hua posted on platform X, stating that the current cryptocurrency market is in a bear market and the war is not over, lacking a significant rebound. The performance of the cryptocurrency sector over the past four years has been disappointing, with the crypto middle class, retail investors, and ...
21:42

Data: 50.08 million USDT transferred out of Binance

According to Coinglass data, on March 27 at 21:07, 50.08 million USDT was monitored being transferred from Binance to an unknown wallet.
21:42

Data: 203.33 BTC transferred from Coinbase, worth approximately 13.54 million USD

According to Arkham data, at 21:03, 203.33 BTC (worth approximately 13.54 million USD) was transferred from Coinbase to multiple addresses, including an anonymous address (starting with 16VGmR...) and an address labeled "Roobet."
21:42

Aster launches modular trading infrastructure Aster Code, collaborating with Binance Wallet, Trust Wallet, Genius Terminal, and others to build the ecosystem

The privacy-focused Layer 1 blockchain trading ecosystem Aster today announced the official launch of the modular Web3 trading infrastructure Aster Code, aimed at simplifying the development threshold for decentralized perpetual contract exchanges (Perp Dex).The first batch of strategic partners for...
21:42

The 30-year yield on U.S. Treasury bonds rose to 4.986%, reaching a new high since September of last year

According to Jinshi Data, the yield on the 30-year U.S. Treasury bond rose to 4.986%, reaching a new high since September of last year.
Read more
Community
iconiconiconiconiconiconicon

Customer Support Bot：@WEEX_support_smart_Bot

VIP Services：support@weex.com