Circle Shares Slide Despite Strong Earnings as USDC Growth Falls Short

Circle Internet Group shares fell by more than 6% following the company’s latest quarterly earnings report, despite posting strong results. The amount of USDC in circulation rose 90% year-over-year to US$61.3 billion (AU$93.9 billion), while total revenue and reserve income climbed 53% to US$658 million (AU$1.01 billion).

Analysts at Mizuho Securities suggested that the stock’s decline was partly due to slower-than-expected growth. 

Circle had projected USDC to achieve a 40% compound annual growth rate, but quarterly growth of just 6% fell short of these targets. They also highlighted that distribution costs have risen from 39% of the reserve pool in 2022 to 64% in the second quarter of 2025, which has reduced margins.

Analysts additionally noted that broader macroeconomic trends were affecting investor sentiment. A slower rise in US consumer prices – reported at 2.7% year-over-year in July – has raised expectations of potential interest rate cuts, which could negatively affect Circle, given its reliance on higher rates for revenue generation.

Mizuho Cuts Stock Target

Mizuho lowered its price target from US$85 (AU$130.2) to US$84 (AU$128.8), maintaining an Underperform rating, reflecting concerns about margin compression and slower-than-anticipated USDC growth. Circle’s shares are currently trading at around US$100 (AU$153.2), giving the company a market capitalisation of US$41.1 billion (AU$62.9 billion).

Mizuho senior analyst Dan Dolev commented that Circle’s post-IPO valuation appeared high relative to actual USDC adoption. He highlighted that while US policy changes have eased the use of stablecoins, real-world adoption of USDC has not met expectations.

Despite its strong quarterly performance, Circle’s combination of slower growth, rising costs, and high valuation has created pressure on its shares, leaving analysts cautious about near-term performance.

Related: Circle Seeks to Open Bank to Expand into TradFi Custody Services