The stock price outlook for Circle Internet (CRCL·Circle), the issuer of the U.S. dollar-backed stablecoin "USDC," is drastically widening. While the potential for the stablecoin market's development is generally assessed as high, opinions are divided over whether Circle can secure a market share that matches its current corporate value.
Individual investors in U.S. stocks, known as 'Seohakgaemi,' who rapidly expanded their investments in Circle are expected to experience significant gains or losses depending on which outlook proves correct.
According to the financial investment industry on the 2nd, Circle's stock closed at $192.53 on the New York Stock Exchange (NYSE) overnight, marking a 6.2% ($11.24) increase from the previous day. The average target stock price for Circle suggested by 13 institutions, according to U.S. investment platform MarketScreener, is $204.2, approximately 6% higher than the current stock price.
Global investment bank Citigroup presented a 'buy' recommendation for Circle along with a target stock price of $243. Citigroup evaluated Circle's potential to grow into a core infrastructure corporation leading the introduction of stablecoins.
Needham & Company ($250), Bernstein ($230), and Barclays ($215), which suggested higher target stock prices than the average, also projected that Circle's USDC could play a central role in the rapid growth of the stablecoin market.
The 'GENIUS Act,' which is under discussion in the House after passing the Senate, is a basis for optimism. The bill includes provisions requiring stablecoin issuers to maintain reserves in safe assets such as cash or short-term government bonds and to undergo external audits for transparency. Given the uncertainty surrounding whether Tether's USDT, which currently holds more than a 60% market share, can meet these requirements, the bill suggests that Circle's USDC could expand its market share once enacted.
Conversely, JP Morgan issued an 'underweight' recommendation for Circle with a target stock price of $80, which is less than half of the current stock price. Goldman Sachs and Deutsche Bank also set 'neutral' investment opinions for Circle, with target stock prices of $83 and $155, respectively.
They also viewed Circle's business as being buoyed by the growth of the stablecoin market. However, they pointed out that Circle's current valuation is excessively high. There are opinions that future regulatory changes and variables such as central bank digital currencies (CBDC) are not adequately reflected in the stock price.
Circle's stock traded at over nine times the offering price ($31) since its listing on the 5th of last month. The current stock price is also more than six times higher than the offering price. JP Morgan noted, "Circle is a great corporation, but now is not the right time to buy," adding, "The current stock price is too expensive and underestimates interest rates and competitive threats."
As Circle's stock price peaked and went through adjustments, an increasing number of investors have already entered a loss zone. The average unrealized profit rate for 15,035 Circle investors linked with Naver Pay's 'My Assets' service is -11.7%. More than 40% of investors are reporting unrealized losses.
Circle has risen to popularity among individual investors riding the wave of stablecoins. On June 19, it entered the top 50 U.S. stocks held by domestic investors for the first time, ranking 47th. As of the end of last month, the total amount held was $622.6 million (approximately 845 billion won), rising to 29th place. The net buying transaction amount for June was $603.98 million (approximately 820 billion won), ranking first among overseas stocks.
☞Stablecoins
Stablecoins are virtual assets designed to be pegged to fiat currencies, such as the U.S. dollar. They operate under the principle of '1 coin equals $1.' Unlike existing virtual assets with high price volatility, they are stable, making them suitable for everyday transactions.