You know that friend who aces every test but still gets grounded because their parents found out about the pizza party? That’s basically what happened to Circle (NYSE: CRCL) this week.
The stablecoin company—think of them as the people who make digital dollars that actually stay worth a dollar—just dropped their Q3 earnings report. And by “dropped,” I mean they absolutely crushed it. We’re talking $740 million in revenue (up 66% from last year), earnings of $0.64 per share when Wall Street expected a measly $0.20, and their USDC stablecoin now has $73.7 billion floating around the internet.
So naturally, investors decided to panic-sell and the stock fell 10%. Because that makes perfect sense, right?
The Plot Twist Nobody Saw Coming
Here’s where it gets interesting. Circle makes most of their money the same way your savings account does—by earning interest on the cash they hold. Except instead of your $47.83 earning you a whopping 12 cents a year, Circle’s sitting on tens of billions backing their USDC tokens, mostly in short-term Treasury bills.
The problem? The Federal Reserve has been cutting interest rates, which means Circle’s money-printing machine is about to slow down. It’s like finding out your favorite all-you-can-eat buffet is switching to portion control.
Plus, Circle just told everyone they’re spending more money—raising their 2025 operating costs to between $495-510 million. Apparently, building the “economic operating system of the internet” (their words, not mine) requires hiring actual humans. Who knew?
The Stablecoin Showdown
Circle is basically the Pepsi to Tether’s Coca-Cola in the stablecoin world. Tether still dominates with over $180 billion in circulation, but Circle’s been steadily gaining ground with their “we actually follow regulations” approach. It’s like being the responsible sibling—less fun, but mom likes you better.
CEO Jeremy Allaire seems pretty chill about the whole situation, basically saying “we’re gaining market share while the pie gets bigger.” Circle’s slice grew from 28% to 29% last quarter, which might not sound like much until you remember we’re talking about a market worth hundreds of billions.
The Reality Check
Despite this week’s drama, Circle’s stock is still up nearly 200% from its IPO price of $31. Sure, it’s down 70% from its June peak, but that’s crypto-adjacent stocks for you—they’re basically the mood ring of the financial world.
The company is also building something called the Arc blockchain network, because apparently running a successful stablecoin business isn’t enough—they want to build their own internet highway too.
Bottom line: Circle posted fantastic numbers, but Wall Street got spooked by rising costs and falling interest rates. It’s a classic case of “buy the rumor, sell the news”—except in this case, the news was actually pretty good. Sometimes the market just needs a moment to figure out what it’s feeling.