CIRCL Stock: Circle Dips Post-earnings; Wood’s ARK Swoops In

Circle Internet Group [CRCL] specializes in blockchain infrastructure and stablecoins, including the widely used USD Coin [USDC] and the Euro Coin [EURC]. 

Founded in 2013 and headquartered in New York, Circle provides global payment, tokenization and liquidity services built for enterprise use. Its platform enables real-time transactions across multiple blockchains and offers developer-friendly APIs for businesses integrating stablecoins into their operations. 

In 2024, Circle reported revenue of approximately $1.68bn, reflecting solid growth in its core network and reserve income, even as net income declined. 

The company went public via a blockbuster IPO in mid-2025, a milestone moment in the regulated crypto space.

Announced on November 12, its Q3 earnings were the first post-IPO. As such, they were closely scrutinized by investors.

All things considered, the results were impressive. Nonetheless, CRCL stock dropped over 10% after their release. 

Let’s unpack those results, and try to figure out why investors got cold feet.

Financial Results: EPS Beat Signals Good Health 

USDC in circulation reached $73.7bn at the end of the quarter, marking a 108% increase compared with the same period last year. Total revenue and reserve income grew 66% year-over-year to $740m, surpassing Wall Street estimates of $707.3m.

Net income more than tripled to $214m, a 202% increase. Adjusted EBITDA rose 78% to $166m.

EPS was $0.64, far in excess analyst expectations of $0.20.

On the corporate and commercial front, over 100 companies participated in the Arc public testnet, representing leading names across banking, payments, digital assets, technology, capital markets, asset issuance and development. “The launch of the Arc public testnet met with extraordinary enthusiasm from partners across traditional and digital finance — evidence of the deep and diverse ecosystem forming around open, programmable money,” said CEO Jeremy Allaire. 

Elsewhere, Circle is also exploring the potential launch of a native token on the Arc Network, while the Circle Payments Network continues to expand, with 29 financial institutions now enrolled, 55 undergoing eligibility review and 500 in the pipeline. The company further strengthened its adoption through new partnerships and expanded collaborations in digital assets, banking infrastructure, payments, international dollar access and capital markets, including with Brex, Deutsche Börse Group [DBOEY], Finastra, Fireblocks, Hyperliquid, Kraken, Itaú Unibanco [ITUB] and Visa [V].

“With growing circulation, accelerating commercial partnerships and expanding collaboration across industries, we’re proud of the tangible progress toward a more open and efficient global financial system,” Allaire noted. 

Squaring the Circle

What was the issue, then? 

In a word: rates. 

Circle earns the bulk of its revenue from interest on the assets supporting its stablecoin, USDC, which are mainly short-term Treasury bills. Management reported that the company’s reserve yield declined by 96 basis points to 4.15% during the quarter, a trend Wall Street had expected following the Federal Reserve’s interest rate cuts earlier this year.

Amid expectations that interest rates could fall next year, it appears that investors — reasonably enough — expect that the firm’s bottom line will be dented. 

On top of this, Seeking Alpha analyst Mike Fay flagged worries around its valuation, which “is extended based on optimistic assumptions and estimates about future revenue from reserves. To reduce risk, CRCL must diversify revenue streams as falling interest rates and political motivations could create significant headwinds in 2026,” Fay wrote.

CFO Jeremy Fox-Geen tried to allay such concerns. “We’re already in a rate-cutting cycle, and through that cycle we are delivering sustained growth,” he told Yahoo Finance on Wednesday morning.

“In many ways, we think falling rates are good for our business in the near term,” Fox-Green underlined. “Falling rates lead to greater economic activity, more risk-taking, and increased investment.”

A reasonable expectation? 

Cathie Wood thinks so. 

Wood’s ARK Invest purchased approximately $30.5m of CRCL shares across three of its funds on Wednesday, taking advantage of the sharp pullback. The ARK Innovation ETF [ARKK] acquired 245,830 shares, the ARK Next Generation Internet ETF [ARKW] 70,613 shares and the ARK Fintech Innovation ETF [ARKF] 36,885 shares.

This massive vote of confidence surely elicited a collective sigh of relief in the Circle boardroom.

Token Efforts: CRCL vs COIN vs FI

Stablecoin is a very new field. As such, if we want to get a sense of where Circle is relative to its peers, we have to compare apples with oranges, to some extent. Still, the following two stocks have sufficient overlap with Circle’s core business to shed some light on its nearer-term prospects.

Coinbase [COIN] is the leading US crypto exchange and has been steadily diversifying into broader crypto infrastructure. Recently, it announced the pending acquisition of investment platform Echo for about $375m in cash and stock, signaling a push into token sales and tokenized securities. The investment case for COIN stock rests on its dominant market position in crypto trading, high-margin revenue from transaction and custody fees, exposure to rising crypto volumes and a regulatory tailwind as the US appears to shift to a more crypto-friendly stance. Risks include regulatory uncertainty, crypto price volatility and the fact that the business is somewhat tied to cyclical trading flows rather than a stable, recurring revenue base.

Fiserv [FI], meanwhile, is a global leader in payments and financial technology, serving roughly 10,000 financial institutions and 6 million merchant locations worldwide. The company is leveraging its scale and deep banking relationships to enter the stable‑coin space with the launch of FIUSD, a bank‑integrated stablecoin set to roll out across its payments infrastructure by the end of 2025. This move positions Fiserv to capitalize on the growing demand for digital-dollar solutions while providing institutions a compliant, trusted alternative to crypto-native stablecoins.

Source: Yahoo Finance

All three firms are embedded in the stablecoin/digital‑payments ecosystem but with distinct business models. Circle is a pure‑play issuer of USDC, earning most of its revenue from interest on the assets backing its stablecoin — meaning its earnings are tightly linked to interest‑rates and circulation growth. Coinbase earns fees from trading, custody and infrastructure, which gives it broader exposure to crypto‑market activity and higher operational leverage, but also greater volatility. Fiserv is a payments technology provider entering the stablecoin space through FIUSD, giving it institutional scale and diversification away from purely crypto assets — but also less levered to upside in stablecoin issuance yield. 

In terms of fundamentals: Circle’s model is simple but highly rate‑sensitive; Coinbase offers growth tied to crypto’s fortunes; Fiserv offers stability and infrastructure exposure but slower growth trajectory.

CRCL Stock: The Investment Case

The Bull Case for Circle

Circle stands to benefit from accelerating adoption of USDC, which underpins most of its revenue through interest on reserves. Its growing institutional client base, expansion of the Circle Payments Network and potential launch of a native Arc token position the company for meaningful long-term growth. Partnerships across digital assets, banking infrastructure and international payments could drive broader adoption and recurring revenue streams. As stablecoins gain traction as a trusted medium for transactions and treasury management, Circle’s scale and regulatory compliance offer a competitive edge.

The Bear Case for Circle

Circle faces risks from its dependence on interest income tied to USDC reserves, making earnings vulnerable to declining interest rates or slower stablecoin growth. Competition in stablecoins and crypto payment infrastructure could erode market share. Regulatory scrutiny remains a constant risk, with potential compliance costs or restrictions impacting operations. Macro volatility, including crypto market fluctuations and global economic uncertainty, could limit adoption and pressure margins. Moreover, new entrants and evolving technologies in digital assets may challenge Circle’s dominance, leaving its growth and profitability exposed to both market and operational risks.

Conclusion

Circle is well-positioned to capitalize on stablecoin adoption and expanding digital payments, offering a potentially steady revenue stream from its USDC reserves. However, its growth and profitability remain sensitive to interest rates, regulatory developments and competition in the rapidly evolving crypto ecosystem.