Why Circle Internet Stock Skyrocketed Up 33.9% Today

Shares of Circle Internet Group (NYSE: CRCL) soared today, finishing the day up 33.9%. The spike came as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) were relatively flat.

The U.S. Senate passed the GENIUS Act, a landmark bill that would create a federal regulatory framework for stablecoins like Circle's USDC.

Big news for stablecoins

While the bill still needs to clear the House of Representatives, the passage of the GENIUS Act through the Senate marks a major step toward integrating stablecoins into the American financial system. The bill allows banks, fintech firms, and retailers to legally issue and use stablecoins, while also establishing consumer protections and regulatory oversight.

Sen. Kirsten Gillibrand, a co-sponsor of the bill, said it will "enable U.S. businesses and consumers to take advantage of the next generation of financial innovation" and "protect consumers, enable responsible innovation, and safeguard the dominance of the U.S. dollar."

Image source: Getty Images.

Stablecoins are cryptocurrencies designed to directly reflect the value of the currency that they are "pegged" to, like the dollar. Circle issues one of the largest and most popular stablecoins on the market.

Circle has already amassed a very large market cap

The company IPO'd earlier this month, and the stock has already more than doubled. There is a lot of excitement around stablecoins, especially now that the GENIUS Act has passed. Circle is in the best position to capture the lion's share of the legal stablecoin market. However, with a market cap of more than $40 billion and sales last year of $1.7 billion. I'm afraid there is too much hype around the stock for my taste.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.