After making a notable debut on the Nasdaq earlier this year, USDC stablecoin issuer Circle (CRCL) has experienced a significant drop in its stock price. After peaking at $298 on June 23, just 18 days after its launch, the stock is now trading at around $82, down 68%.
Circles face challenges as lock-up period approaches
Despite benefiting from the loosening of regulations on digital assets in the United States due to President Trump’s crypto policy, Circle faces challenges that history does not favor, especially as it approaches the end of the lock-up period.
Analysts including Mizuho’s Dan Dolev, highlighted This lock-up period typically prevents insiders from selling stock for 180 days after the initial public offering.
According to Circle’s initial public offering (IPO) filing, the lock-up period is scheduled to end this Friday, two days after the company releases its third-quarter results.
Mizuho analyzed more than 750 IPOs with market capitalizations of more than $1 billion and found that 58% of companies outperformed their market capitalization. S&P500 Before the lock-up period, the index tends to be lower than the 180-day index after the lock-up period. These companies are seeing an average decline of about 2%.
The outlook is even more dire for companies that miss earnings expectations in the year following their IPO, with returns averaging about 10% lower than the S&P 500.
According to Mizuho, Circle may fall into the latter category. A significant portion of the company’s revenue comes from interest. USDC reserves It is held in short-term U.S. Treasuries, Treasury bonds, and cash.
As a result, lower interest rates or slower-than-expected growth in USDC could adversely affect our revenue streams. Drev pointed out:
In our view, CRCL believes consensus forecasts are likely to be revised downward in the coming years amid declining rates and slowing adoption of USDC stablecoins, as well as increasing distribution costs.
Is CRCL an opportunity to buy low?
Despite these potential downward revisions, Circle recently beat consensus estimates for both revenue and earnings in its third quarter report.
In response to this announcement, JPMorgan issued the following statement: double upgrade They upgraded the stock from underweight to overweight and raised their price target from $94 to $100. The bank highlighted USDC’s leading role in this space and the continued acceptance of stablecoins within mainstream financial institutions.
But JPMorgan analyst Kenneth Worthington said the impending lockup expiration is already putting downward pressure on Circle stock.
He viewed the current situation as an “opportunity to buy low” for investors, suggesting that the post-lockup share price drop may have pushed stocks below December levels. 2026 price targetindicating future upside potential.
Featured image from DALL-E, chart from TradingView.com
