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Circle ($CRCL) Stock Price Halved: Full Analysis: Is Now a Bottom-Fishing Opportunity? (Concerns about reserve income and Open USD competition) Circle's stock price has plummeted from a peak of $140 in May to $60. It all started on 5/11 when Circle released its Q1 earnings report before the market opened, showing USDC's circulating supply up 28% year-on-year and on-chain trading volume surging 263%, driving the stock price up to a peak of $140 the next day. But why did the stock price then fall all the way to $60? Possible reasons: 1. Income is highly dependent on reserves, and interest rate cuts will directly affect income In 2025, about 96% of Circle's revenue will come from reserve interest. In Q1 2026, the reserve yield dropped to 3.5% (down 66 basis points year-on-year). Although $USDC circulation grew 28% year-on-year, revenue only grew 20% year-over-year—more than half of the revenue, which should have surged with scale, was swallowed up by rate cuts. This is precisely the concern reported by many media outlets: "Circle's revenue is heavily affected by rate cuts." ➡️ Did you see clearly? Although the rate cut affected Circle's revenue, in reality it was just a slowdown in growth. Revenue continues to rise, and after hawkish chairman Kevin Warsh took office, interest rates have remained at 3.50~3.75%. The market expects the market has even shifted from "rate cuts" to "possible rate hikes or unchanged." This means that the scenario of continued rate cuts suppressing Circle's revenue is actually unlikely to happen in the future. 2. Open USD competition On June 30, Open Standard unveiled its revenue-sharing stablecoin Open USD (OUSD), featuring a star-studded alliance of over 140 institutions including Visa, Mastercard, Stripe, BlackRock, Coinbase, and others. Compared to Circle's monopoly on interest, this could erode $USDC's market share. ➡️ In fact, OUSD has yet to officially launch, meaning it has not taken up any of the stablecoin market share. Similar historical events have already been referenced. In 2024, Paxos launched USDG, also following a profit-sharing model with a star-studded lineup (Mastercard, Kraken, Robinhood), but has only grown to about $3 billion so far, far less than USDC's $73 billion and USDT's $184 billion. Relying solely on profit-sharing incentives is unlikely to shake the leader. 🔴 Is the current $60 stock price a sign of panic overselling? 🔴 Circle's total revenue for 2025 is $2.747 billion, but it still has a net loss of $70 million, mainly due to: ▪️ Compensation-related expenses amounted to approximately $845 million (including a one-time stock bonus of $420 million for employees and executives at the time of IPO) ▪️ Share of profits for Coinbase (about 50% of reserve interest income) By Q1 2026, net profit had shifted to $55 million. Besides revenue growth, stock bonus expenses were significantly reduced, no longer large one-time stock bonus expenses, but instead of regular equity incentives, estimated annual expenses of about $250~350 million; Revenue sharing for Coinbase dropped to about 44% in Q1 2026 (as Circle's own USDC holdings increased significantly, diluting the share of profit). Circle is expected to have a net profit of $2~280 million this year, and about $350~$500 million next year. Additionally, USDC circulation is worth watching. This year, it fell from $77 billion at the end of Q1 to about $73 billion by mid-July, a decrease of about 5%. If it continues to decline, it will reduce reserve income. Summary: Revenue still grew 20% year-on-year, but circulating supply fell by only about 5%. The stock price decline far outweighed the deterioration in fundamentals, suggesting it was more of an emotional decline. Looking ahead, attention can be paid to the profit-sharing negotiations with Coinbase in August and the impact of OpenUSD actually going live. "The above is a personal summary, not investment advice." $CRCL