Compass Point downgrades Circle to sell after Trump passes landmark crypto legislation
Circle Internet Group could ironically be under pressure after the passing of key crypto legislation, according to Compass Point. Analyst Ed Engle lowered his rating on the USDC stablecoin manager to sell from neutral and cut his price target on the stock $130 from $205. The new forecast implies downside of 40% from Monday’s close. President Donald Trump on Friday signed into law the GENIUS Act, a piece of legislation dedicated to regulating stablecoins. But while this legislation is a positive for the crypto industry, Engle believes it will Circle will be under pressure in the short term. “While we expected CRCL to rally into stablecoin legislation, crypto investors typically ‘sell the news’ after highly anticipated events. As such, we expect CRCL to retrace some of its recent rally after the GENIUS act was signed into law on 7/18,” he wrote. “We still believe USDC can be an integral part of the financial system; however, we’re more cautious towards CRCL’s long-term economics than its $53bn valuation implies.” Shares of Circle have rallied a whopping 597% since debuting in early June. CRCL 3M mountain CRCL 3M chart Competitive pressures could also mount from here for Circle. “We expect more mainstream fintechs and banks to announce competing stablecoins in 2H25, primarily through white-labeling and/or M & A,” Engle wrote. “These 2H25 catalysts could force investors to recalibrate long-term EBITDA margin and market share expectations while putting pressure on CRCL’s premium valuation.” The analyst also pointed out that there is a cap to the number of blockchain integrations Circle can complete from here, further limiting the stock’s upside. “USDC is already integrated with 24 different blockchains, and there are only so many chains that can afford these integration fees. As such, we expect this income stream to normalize lower in 2026 and beyond,” he wrote.
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