Key Takeaways
- Circle shares have dropped 68% since June 2025, signaling potential volatility ahead.
- The end of the lockup period may intensify downward pressure on CRCL stock.
- Revenue risks tied to USDC reserves and interest rate fluctuations could affect future earnings.
- Analysts suggest caution as historical trends indicate post-lockup underperformance is common.
Circle Stock Plummets Nearly 70% After IPO Surge
Circle (CRCL), the company behind the USDC stablecoin, is facing a stark reality just months after its Nasdaq debut. Following a peak of $298 on June 23, only 18 days after its IPO, shares have now tumbled approximately 68%, trading near $82. Analysts warn that the decline may continue as the company approaches the end of its lockup period.
Lockup Period Could Trigger Further Pressure
The lockup period, which prevents insiders from selling their shares for 180 days after an IPO, is set to expire two days after Circle releases its third-quarter earnings this Friday. Historically, data from Mizuho covering over 750 IPOs with valuations above $1 billion shows that 58% of companies outperforming the S&P 500 before their lockup period subsequently underperform in the next 180 days, with an average 2% drop.
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For firms missing revenue expectations, the trend is worse—an average underperformance of 10% relative to the S&P 500. With Circle’s recent stock trajectory and earnings pressures, analysts suggest the company could fall into this higher-risk category.
Revenue Risks and Stablecoin Growth Concerns
Circle’s revenue largely depends on interest earned from USDC reserves invested in short-term U.S. Treasuries, repurchase agreements, and cash. A decline in interest rates, coupled with slower-than-anticipated USDC adoption, could significantly impact revenue. Mizuho analyst Dan Dolev noted that declining rates and higher distribution costs could force downward revisions to consensus estimates for CRCL in the coming years.
Also Read: How Aptos Quietly Outpaced Rivals in Stablecoin Growth
This warning highlights a broader challenge for stablecoin issuers: relying heavily on financial instruments for revenue makes growth projections vulnerable to macroeconomic shifts and market sentiment.
Conclusion
Investors in Circle face a critical juncture as the lockup period ends and revenue uncertainties mount. While USDC remains a widely used stablecoin, CRCL’s stock trajectory underscores the risks inherent in high-growth crypto-related IPOs. Staying informed and monitoring upcoming earnings announcements is essential for navigating this volatile landscape.
