- - Circle stock sinks on 10 million share sale after monster 425% rally since IPO

Ines FerréAugust 13, 2025 at 2:15 AM

Circle (CRCL) stock fell more than 4% in premarket hours on Wednesday after the company filed to sell 10 million shares following a 425% rally since its IPO. The announcement came on the heels of the company's first-ever earnings report since its blockbuster public debut, which showed better-than-expected revenue during the quarter.

In an SEC filing, the stable-coin issuer said it is offering 2 million shares of Class A common stock and 8 million shares by existing stockholders.

In day trading, Circle shares closed north of $163 per share, or more than 1% higher, after the company's second quarter total revenue came in at $658 million, versus the $647 million analysts expected.

CEO Jeremy Allaire said the company's stablecoin, USDC (USDC-USD), was the "fastest-growing major stablecoin over the past year."

USDC in circulation grew 90% year over year to $61.3 billion at quarter end and has grown an additional 6.4% to $65.2 billion as of Aug. 10.

"Overall activity globally in the digital asset economy has been growing," Allaire told Yahoo Finance on Tuesday morning.

"We're continuing to see growth in the use of dollar digital currencies like USDC as a store of value around the world in cross-border settlements," he added. "Use cases continue to expand, and I think people are finding that this is an incredibly high utility, new form of money."

The company also announced ARC, a new blockchain network for stablecoin finance that will launch in the second half of the year.

"We wanted to create a way for institutions to pay fees on blockchains in a fast, predictable manner that would be simple from an accounting perspective and could deliver very low-cost and stable fees," Allaire said during the company's earnings call on Tuesday morning.

Circle, which went public on June 5, has been at the center of optimism over the stablecoin market following the passage of the GENIUS Act, legislation that creates guardrails and a framework for digital tokens backed by assets such as the US dollar.

Read more: Can you buy crypto with a credit card? See the pros and cons.

Circle makes much of its money from interest income, specifically from short-term Treasury bills backing its stablecoin, USDC.

The company's reserve income increased 50% year over year to $634 million, primarily from an 86% growth in USDC stablecoin circulation.

Allaire indicated that if the Federal Reserve cuts interest rates and yields on short-term Treasurys decline, the growth of stablecoins will offset the decline in rates.

"We believe that lower interest rates are going to be accelerative to the business, as money velocity picks up, as invested capital picks up, and as more people are putting money to use in the economy, this very high utility form of money will grow," Allaire said.

The company also shares part of its revenue with Coinbase (COIN), a major distribution partner.

Last month, Compass Point analyst Ed Engel flagged the risk of rising distribution costs as the company expands its network while continuing to share a portion of its interest income.

On Tuesday morning, Engel said Circle's gross profit margin guidance of 36% to 38% for fiscal year 2025 "slightly underwhelmed."

Engel said the forecast implies that second-half margins will come in below the first half of the year's 39%, writing that "we would have expected higher gross margins in 2H25."

"While CRCL's lower margin guidance could be due to conservatism, CRCL's recent partnerships don't seem to benefiting the near-term margin outlook. As such, we reiterate our Sell rating and $130 PT," he wrote.

However, others on Wall Street saw the stock as a way for investors to participate in rising enthusiasm over stablecoins.

"CRCL is a global leader in stablecoins and is the purest stablecoin play in the public markets right now, and we anticipate further gains in the shares as the company creates new opportunities for itself and its partners," Seaport Research analyst Jeff Cantwell wrote last month.

The analyst has a Buy rating and price target of $280 on the stock.

Circle's results come as the overall market hovers near all-time highs and crypto rallies on expectations of Federal Reserve rate cuts and President Trump's push to include crypto in 401(k) plans.

Prior to the earnings release, Wall Street analysts had nine Buy, five Hold, and four Sell ratings on Circle stock.

In this photo illustration, a person holds a smartphone displaying the logo of Circle Internet Group, a global fintech company and issuer of the USDC stablecoin. (Cheng Xin/Getty Images) (Cheng Xin via Getty Images)

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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