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

Circle Internet Group CRCL shares have plunged 59.1% over the past six-month period, sharply underperforming the Zacks Finance sector’s growth of 7.7% and the Zacks Financial- Miscellaneous Services industry’s decline of 14.1%.

CRCL’s underperformance reflects concerns over increased full-year 2025 operating expense guidance and its impact on margins. Regulatory uncertainty tied to the GENIUS Act, along with Arc execution risk, heavy investment spending and growing stablecoin competition, further limit upside.

CRCL stock has also underperformed relative to its competitors, including Cipher Mining CIFR and Coinbase Global COIN. In the past six months, Cipher Mining’s shares have surged 213.7%, while Coinbase Global’s shares have declined 28.6%, reflecting muted investor confidence.

Cipher Mining competes with CRCL in the crypto-infrastructure sector, generating revenues from Bitcoin mining rather than payments. Coinbase Global overlaps more closely, offering crypto trading and custody, while CRCL differentiates itself through regulated stablecoins and blockchain-based payment infrastructure.

Despite the steep share price decline, attention now turns to whether CRCL’s fundamentals are strong enough to support a hold view. Let’s take a closer look.

CRCL’s Six-Month Price Performance

CRCL Benefits From Expanding USDC Adoption

Circle continues to benefit from accelerating USDC adoption, which is translating into strong network growth and financial performance. In the third quarter of 2025, USDC in circulation reached $73.7 billion, more than doubling year over year and significantly lifting the company’s market share to 29%. This expansion translated directly into financial gains, with total revenues and reserve income rising 66% year over year to $740 million, driven primarily by higher average USDC balances and strong on-chain usage.

USDC’s growing utility across payments, trading and on-chain finance further reinforces Circle’s revenue model. On-chain USDC transaction volume surged to $9.6 trillion in the reported quarter, highlighting rising velocity and usage as a medium of exchange. Meaningful wallets holding USDC increased 77% year over year to 6.3 million, underscoring broader user adoption.

Growing institutional participation strengthens the case for sustained USDC growth. Circle has reported new and expanded partnerships across banking, payments and digital asset platforms, alongside rapid growth in Circle Payments Network activity. The recent partnership with Intuit INTU further underscores the expanding utility of USDC. Intuit is integrating Circle’s stablecoin infrastructure and USDC across major products, including TurboTax, QuickBooks, Credit Karma and Mailchimp, to support faster and more cost-efficient payments for consumers and small businesses.

Expansion Beyond Reserve-Only Revenue Supports Upside

Circle is steadily reducing its reliance on interest-rate driven reserve income by expanding into subscription, services and transaction-based revenues. In the third quarter of 2025, Other revenues rose to $29 million from less than $1 million in the previous year, driven by strong growth in subscription and services revenues tied to blockchain network partnerships. Management subsequently raised full-year 2025 Other revenue guidance to $90-$100 million, highlighting increasing visibility and scalability of non-reserve income streams.

This revenue diversification is reinforced by Circle’s expanding platform, including Arc, Circle Payments Network and cross-chain infrastructure such as CCTP, which enable monetization beyond reserve yields. This indicates Circle has diversified beyond reserve-only revenues, positioning it as a comprehensive internet financial platform.

Arc Network Emerges as a Long-Term Platform Opportunity

Arc is positioned as Circle’s most strategic long-term growth initiative, designed to function as an enterprise-grade Layer-1 “economic operating system” for the internet. During the third quarter of 2025, Circle launched the Arc public testnet with more than 100 world-class companies spanning global banks, asset managers, payment networks, fintechs, technology firms and digital asset platforms.

Fully integrated with USDC, USYC and the Circle Payments Network, Arc offers a unified stack for developers and institutions. Circle plans to launch the mainnet in 2026 and is exploring a native Arc token to support incentives and governance. Over time, management expects Arc to serve as a global foundational layer, supporting new revenue opportunities and platform expansion.

CRCL’s Earnings Estimate Shows Downward Trend

While these developments strengthen CRCL’s long-term outlook, they also create near-term headwinds from rising distribution and incentive costs and regulatory uncertainty, which are reflected in analyst projections.

The Zacks Consensus Estimate for CRCL’s fourth-quarter 2025 earnings is currently pegged at 19 cents per share, down by 4 cents over the past 30 days.

The consensus mark for the full-year 2026 earnings is pegged at 90 cents per share, a decline of 2 cents over the past 30 days.

The technical indicator is also bearish for Circle as its shares trade below the 50-day moving average, which indicates limited upside in the near-term momentum for the stock.

CRCL Shares Trade Below 50-Day SMA

Conclusion

Although CRCL has underperformed recently, the company benefits from growing USDC adoption, expanding institutional partnerships and a clear shift from reserve-only income toward platform-driven revenues. The long-term potential from Arc and the Circle Payments Network supports a growth-focused thesis. However, increased operating expense guidance, regulatory uncertainty concerning stablecoins and near-term earnings downgrades limit upside potential, leading to a cautious hold recommendation.

Circle currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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