Simply put
- Circle (CRCL) has gained recognition as a leading cryptocurrency after Seaport Global initiated coverage with a buy rating and set a price target of $235, seeing a jump of 14% to $228.
- This surge is expected to be supported by the Senate’s passage of the Stabilization Act, which aims to create a federal framework for stubcoins, particularly those not tied to the dollar.
- Circle and Coinbase have capitalized on regulatory momentum due to a revenue-sharing agreement concerning USDC’s cash reserves amounting to $61.2 billion, while Robinhood experienced a drop of 1.65%.
On Friday, the USDC issuer, Circle, was quite active in pre-market trading, climbing above $236, which puts it ahead of the $235 target established by Seaport Global.
However, as the market opened, shares of the company traded on the NYSE under the ticker CRCL settled around $228, reflecting a 14% increase from the prior close.
Seaport announced its coverage for Circle on Friday before market hours, with analyst Jeff Cantwell labeling the stubcoin issuer as a “top-tier crypto disruptor” and predicting the $260 billion stablecoin market could grow to $2 trillion.
In an analysis, Cantwell noted that USDC is designed for consistent disruption, highlighting that Circle’s founders envisioned a framework akin to “http for money,” aiming to streamline transactions to foster global economic growth.
He also hinted at a potential 30% annual revenue growth for Circle, coupled with an increasing margin. Yet, while current interest rates favor the company, Cantwell pointed out that this reliance on interest income—90% of revenue in 2023 and 2024—also represents a risk if rates decline.
Both Circle and the crypto exchange Coinbase have drawn investor interest following the Senate’s endorsement of the Genius Act, a significant legislative move for stablecoins. They have a deal to share interest from $61.2 billion in cash reserves backing their stablecoin tokens.
The Genius Act would mark the first comprehensive federal framework for stablecoins denominated in US dollars once it becomes law.
On Friday, Coinbase’s ticker coin gained 3% compared to Wednesday’s close. (For context, the market was closed on Thursday, June 19th.)
Contrastingly, Robinhood, which isn’t exclusively focused on crypto and lacks direct ties to stablecoins, faced a rough start on Friday, with shares under the Hood ticker on Nasdaq falling to $76.76, a 2% drop from Wednesday.
Robinhood reached a 52-week high of $77.83 on Wednesday, breaking past the $61 target from Deutsche Bank and an earlier estimate by Canter Fitzgerald.
Though it has room to climb towards the $90 target set by Summit Redstone Partners’ Michael Sipleys, there’s still some way to go.
Last week, Robinhood revealed a significant increase in total assets, now at $225 billion, marking an impressive 89% rise year-over-year and a 10% increase since April.
