Circle dropped 30%. Why am I not rushing to buy the dip?

Byline: Ruby

Circle drops from $130 to $90, a 30% fall, then rebounds. Should you build a position? My take: not yet. At $90, Circle is charging you the price of a “fintech platform” for an “interest-rate bank.”

I flipped through its 10-K annual report, pulled Q1 on-chain data, checked Polymarket’s interest rate expectations, read the latest draft of the CLARITY Act, and even went through every insider stock-sell record—here’s my assessment.

This article is only meant to update my views on $CRCL and does not constitute investment advice.

First, the conclusion

$90+ is not a good entry price for building a position. My view is to hold. Want to add? A better entry range is $80 or lower.

Why? 96% of revenue comes from the interest-rate bank model, but the market is pricing it like a fintech platform—forward P/E of 40+ times, which already puts it in the higher range.

Over the next six months, three catalysts will determine where things go: the CLARITY Act Senate committee vote (a key window in late April), the Q1 earnings report (expected from mid-May to early June), and the Coinbase agreement renewal + Q2 earnings (August). In addition, if BTC falls below $60K, a broad downside move in crypto-linked equities is also a potential downside catalyst. If any of these produce negative outcomes, the stock could be pushed into the target range.

I still like the long-term direction of stablecoin payments, but the current price hasn’t offered enough of a safety margin to add.

1. Valuation: At a $90 stock price, what are you buying?

You’re paying “fintech platform” pricing for an interest-rate bank that hasn’t finished its transformation yet.

1.1 Circle’s P/S needs to be adjusted into P/RLDC

A $90 stock price implies a valuation of $22 billion. Based on FY25 total revenue of $2.75 billion. On the surface, the P/S looks like 8—many people would say it’s undervalued.

But don’t forget: $1.66 billion is distribution costs—primarily payments to Coinbase. After that, the revenue that truly stays in Circle’s pocket (RLDC, Revenue Less Distribution Costs) is only $1.08 billion.

So Circle’s valuation can’t be judged by the headline P/S; it should be based on P/RLDC—i.e., 20x. That’s above Visa and Mastercard’s current P/S (about 11–12x), and close to Adyen’s historical valuation ceiling (~20x). And the net profit margins for these payment networks are in the 45–65% range.

Today, Circle’s business model is 96% the bank spread model, and only 4% is other revenue close to a fintech platform. The market is giving it dual pricing: “bank valuation + platform dreams.” We split the $90 into two layers:

The reason the platform option range is so wide is that CPN, Arc, and AI Agent revenue have not yet been validated—uncertainty itself is part of what’s being priced.

1.2 Outlook for 2028 stablecoins

So you might say what we need to look at is the future. Yes—I’m also absolutely bullish on stablecoin payments and the long-term market cap potential, and it’s one of the few use cases in crypto that can keep growing without being as affected by the cycle. So let’s calculate this opportunity space together—so you can see which side you’ll end up on.

Below is management’s guidance for fiscal year 2026

CRCL FY25 Q4 earnings management guidance

Estimate in the direction that fully hits the reporting guidance this year. Assumptions: total stablecoin issuance grows at a 40% YoY rate. This year USDC outstanding is 90–100B, average interest rate is 3.3%. Other revenue reaches management guidance of $150–170M, and RLDC margin is 40%.

Under these assumptions, Circle’s forward P/E at $90 is 40+ times. Compared with peer fintech companies, it’s already in an elevated range.

Of course, if you’re willing to bet on the narrative of agentic payments, the Arc chain, and the CPN network, you can believe Circle is worth $110–120+. But looking purely at current revenue, the market has already priced in Circle’s platform narrative.

Note: personal estimates and analysis, for reference only

2. Key focus points for Circle’s 2026 earnings

The advantage of “crypto stocks” is that on-chain data can be observed ahead of the earnings report. How have stablecoins and USDC performed over the past quarter?

2.1 Observing stablecoin size in 26’s Q1

The good news is that from 2025 Q4 to 2026 Q1, even though we’ve been through a crypto bear market, stablecoin issuance size is still growing. But the quarter-over-quarter growth rate has slowed—its slowest quarter since Q4 2023. In other words, the logic of pushing revenue via USDC volume growth is having a hard time moving fast in the short term.

The chart below shows the quarterly growth rate of stablecoin supply from 2024 to 2026—pay attention to that rightmost bar.

The key point: emerging stablecoins (USD1, USDS, etc.) together already account for about 15% of market share, and the duopoly’s total pie is being eaten away. Circle’s share hasn’t been lost, but it also hasn’t captured incremental share.

2025 Q4 vs 2026 Q1 stablecoin issuer share (multiple data sources compiled; slightly different perspectives may have small errors)

2.2 Earnings forecast for Q1—any big surprises?

Most likely it will just meet expectations, with no big surprises. If there’s no rate cut, reserve-income plus $30–40M of other revenue should be enough to hit the target. If there is a turning point, it’s still about whether other revenue growth exceeds expectations.

To match management’s full-year 40% CAGR target, the real pressure for USDC growth is in Q2–Q4, and issuance needs to reach about $105B by year-end.

2.3 Policy angle: CLARITY Act and missing “pushers”

The biggest recent concern is the yield ban provision in the CLARITY Act clarity bill.

Circle itself doesn’t pay yield, so its business model isn’t directly impacted. But the indirect impact is real—the transmission chain is like this:

Yield ban takes effect → Coinbase can’t offer passive USDC yields (active rewards are still allowed) → the reason for retail users to hold USDC weakens → circulation growth slows → Circle’s core revenue engine decelerates

Another risk that’s easy to overlook: the White House’s most crucial legislative driver for crypto is no longer there. David Sacks left on March 26 after his 130-day term as a special government employee expired, and he moved on to become Co-Chair of PCAST, with no successor. This means that if the bill isn’t passed before May, digital asset legislation will be difficult to move forward in the foreseeable future—the most critical legislative window has lost its strongest internal advocate.

Below, I’ve organized the key events and timing to watch this year:

3. Who’s trading CRCL? Is it a retail-stock type?

$CRCL is one of the crypto tickers most frequently mentioned on social networks—high elasticity, big volatility, and it has a bit of a meme-stock vibe.

3.1 Why there’s a lot of disagreement on $CRCL

I specifically checked the latest data. Circle’s shareholding structure is roughly as follows:

Source: Tipranks

It listed only in 2025, and institutional ownership is below 40%. The allocation ratio isn’t as mature as that of growth technology stocks. You could say it’s dominated by retail investors and insiders.

Retail-stock beta is high, and it’s more narrative-driven. Volatility is the norm, and overvaluation and undervaluation are also the norm. That’s why the valuations provided by institutions range from $60 to $280—a 4–5x gap.

Based on the shareholding structure and the retail portion, similar U.S. stock cases include Coinbase at the time of its initial listing, and today’s Palantir and Robinhood—each is retail-dominated, narrative-driven, and extremely volatile.

The good news is that as institutional ownership rises, there’s room for a “institutionalization premium” over the long run.

3.2 Ongoing insider selling—worth referencing

After the last earnings release, I tracked all SEC filings and went through all reported insider stock-sale transactions.

From February 26 to April 2, insiders made about 23 public market sales in total, totaling roughly 649k shares and about $62.2M.

Purchases in the same period: 0 trades.

Of course, selling after the IPO lock-up period is normal. But the 23:0 ratio, and the sale price range ($82 to $123), are still worth paying attention to.

Ranking by selling intensity:

Heath Tarbert (President) most aggressive — 4 sales totaling ~191k shares, netting ~$19.35M, cumulative reduction about 26%

M. Michele Burns (Director) — 4 sales totaling ~162k shares, netting ~$15.93M, cumulative reduction about 27%

Patrick Sean Neville (Director) — on April 1, sold 50% of his Class A holdings; Class A is now only 30k shares, but he still holds about 2.36M shares of Class B and a large amount of options. However, Jeremy Allaire (CEO) has an extremely small overall reduction percentage. He sold 15,625 shares on February 26 (about $1.4M), but his overall reduction percentage remains small. He currently directly + in trust holds about 560k shares of Class A and 16.2M shares of Class B, with an economic ownership share of about 6.8%. Since Class B has 5 votes per share (a total voting power cap of 30%, shared with co-founder Neville), Allaire effectively controls about 26% of the total voting power. Data sources: SEC, Markets Daily, Ticker report

4. Circle’s real competition comes from new narratives

Stablecoin issuance is already a red ocean; stablecoin payments is the blue ocean.

The landscape for compliant stablecoin issuance is basically stable, and profits can be calculated. Circle’s story is no longer about issuance volume—now it’s in other revenue: CPN payment network, wallets, and the Arc blockchain.

So in my view, Tether is no longer the true management-level benchmark for Circle. Even if Tether takes a compliant route into the U.S., the USDC circulation in existing compliant platforms likely won’t change much in the near term—Circle announcing deeper cooperation with Polymarket these days is one example. Tether’s strategic focus this year is also shifting toward diversification investments and gold token XAUT (if you’re interested, you can read my prior tweet).

The real competition Circle needs to face comes from Stripe.

The strategic direction of CPN payment network + wallet + Arc blockchain overlaps heavily with Stripe, which has a valuation of $160B. After Stripe set its AI + stablecoin strategy in 2025, execution has been ramped up—acquiring Bridge and Privy, launching the Tempo mainnet, and delivering the MPP protocol. Both companies are going all-in on agentic payments, and have joined the x402 protocol led by Coinbase.

If Stripe goes public, Circle’s scarcity as the “stablecoin first” stock could get discounted.

Tempo is already live—so the pressure now shifts to Circle. When will the Arc blockchain mainnet be released? Also, management mentioned in earnings meeting discussions that they are exploring token issuance. The rollout progress of Arc and AI payments is the key to judging whether Circle can form a second revenue curve.

5. Summary

Even in the crypto bear market, the stablecoin market is still growing, but the growth rate has slowed.

The duopoly structure is stable, but long-tail competitors are eroding share.

Issuance is the red ocean; payments is the blue ocean—and on this payments front, both CPN and Arc still haven’t delivered explosive growth.

$CRCL remains a scarce U.S. listed equity in the stablecoin space, and the high retail share also helps explain why market attention is so strong. Agent payments are the contested territory for incremental growth in the future. There’s upside potential in the imagination, but large payment-volume scenarios have not yet been rolled out.

$80–100 is a reasonable but somewhat optimistic valuation range. I’ll keep holding $90—no buying, no selling—until catalysts arrive. Finally, I compiled the metrics and impactful events to watch for $CRCL this year for everyone’s reference

The analysis above is based on publicly available information and my personal judgment, and does not constitute investment advice. The analytical framework uses my self-built Tech Earnings Deep Dive Skill.