Circle Shares Drop 18% on Competing Stablecoin Launch News, Analysts Say Overreaction
Shares of USDC issuer Circle (CRCL) fell 18% on Tuesday following the announcement of a new stablecoin, Open USD (OUSD), backed by major partners including Coinbase, Visa, and Mastercard. However, analysts at Clear Street argued the selloff was an overreaction, noting that OUSD lacks evidence of real traction and is similar to USDG, a stablecoin that failed to gain significant market share. Despite the narrative threat, Circle's USDC remains dominant as the second-largest stablecoin with a $73 billion market cap, only trailing Tether's USDT. Circle CEO Jeremy Allaire emphasized USDC's massive scale, deep liquidity, and regulatory integration as key advantages that OUSD will not have at launch. CRCL shares have partially recovered, trading around $64.55, but are still down over 75% from their 52-week high of $262.97. Clear Street set a 12-month price target of $157, implying a 140% upside.
Key facts
- Circle shares dropped 18% on news of OUSD stablecoin launch backed by Visa, Mastercard, Coinbase.
- Clear Street analysts call selloff overreaction, saying OUSD lacks proven traction.
- USDC remains second-largest stablecoin with $73B market cap, behind Tether's $184B.
- CRCL shares recovered 3% to ~$64.55, but down 75% from 52-week high of $262.97.
- Clear Street sets 12-month price target at $157, implying 140% upside.