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Circle’s Rapid USDC Expansion Fails to Boost Struggling Shares Amid Rising Expenses and Divided Analyst Opinions

Circle’s Rapid USDC Expansion Fails to Boost Struggling Shares Amid Rising Expenses and Divided Analyst Opinions

Bitget-RWA2025/11/12 13:22
By:Bitget-RWA

- Circle reported strong Q3 2025 results with $73.7B USDC growth but stock fell 5.4% premarket as costs rise and analysts split. - Revenue surged 66% to $740M while net income jumped 202% to $214M, yet RLDC margins dropped 270 bps to 39% amid expanding balances. - Arc blockchain's public testnet attracted 100+ institutional participants, with partnerships announced with Deutsche Börse and Visa to expand stablecoin adoption. - Analysts remain divided: J.P. Morgan "Sell" vs. Monness Crespi "Buy" at $150, whi

Circle Internet Group (CRCL) delivered strong results for the third quarter of fiscal 2025, fueled by rapid expansion in its

stablecoin network. However, shares dropped 5.4% in premarket trading as investors reacted to increasing expenses and mixed reviews from analysts. USDC’s circulation soared to $73.7 billion by the end of the quarter, marking a 108% increase from the previous year. This surge pushed total revenue and reserve earnings to $740 million, up 66% compared to the same period in 2024, according to a .
Circle’s Rapid USDC Expansion Fails to Boost Struggling Shares Amid Rising Expenses and Divided Analyst Opinions image 0
Net profit climbed 202% to $214 million, while adjusted EBITDA rose 78% to $166 million, as noted in a . Despite these positive numbers, CRCL’s stock continued to slide, deepening its 8.7% year-to-date loss after a surge following its IPO in June, according to a .

The earnings release also underscored Circle’s strategic move into institutional finance with its Arc blockchain platform. The company rolled out a public testnet for Arc, drawing over 100 participants from the banking, fintech, and digital asset sectors, as reported by

. Arc’s goal is to connect traditional and decentralized finance by supporting programmable financial operations, and is considering launching a native token to encourage network activity—a step that could significantly influence its future growth, according to the . The company also revealed collaborations with Deutsche Börse and Visa to promote stablecoin use in Europe and among institutional clients, as detailed in the .

Analysts remain split in their outlook. J.P. Morgan kept a "Sell" recommendation, citing overvaluation despite better profitability, while Monness Crespi Hardt began coverage with a "Buy" rating and a $150 price target, suggesting a 52.6% potential upside, according to the

. TipRanks’ consensus rates the stock as a "Moderate Buy," with an average price target of $166.19—69.1% higher than current prices, as per the . Still, there are worries about shrinking margins. The RLDC (revenue less distribution costs) margin dropped to 39% in Q3, down 270 basis points from a year earlier, as distribution costs climbed alongside growing USDC balances, according to a .

Circle’s outlook points to ongoing investments in its platform and new partnerships. The company raised its 2025 "Other Revenue" forecast to $90–$100 million from the previous $75–$85 million and now expects adjusted operating expenses of $495–$510 million, higher than earlier projections, as stated in the

. CEO Jeremy Allaire highlighted the "rapidly growing adoption of USDC" and described Circle as a creator of the "next-generation Economic OS for the internet," according to the .

Regulatory developments in 2025 have brought more clarity for stablecoins, supporting Circle’s growth plans. Nonetheless, challenges remain. A quicker-than-anticipated reduction in Fed rates could slow reserve income growth, and intensifying competition from

and decentralized alternatives could pressure long-term profitability, according to an . Circle’s consideration of reversible stablecoin transactions for institutional clients—departing from the typical irreversibility of crypto—signals a shift toward the flexibility favored in traditional finance, which may help attract banks, as discussed in the .

Investors are expected to monitor Arc’s development closely, including the timeline for launching a native token and its integration with the Circle Payments Network. For now, Circle’s performance depends on maintaining USDC’s 29% market share while effectively managing distribution expenses and navigating regulatory challenges, as reported by

.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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