Last Updated – July 03, 2025
Circle Internet Group Inc. (NYSE: CRCL), the issuer of the world’s second-largest stablecoin, USDC, is facing a turbulent week. Already down 17.3% from the previous week’s close and wiping out nearly $24 billion in market capitalization from Monday’s intraday peak of $298.99, CRCL touched the $200 mark on Wednesday.
After a wild rally sparked by a strategic partnership with Fiserv (NYSE: FI) on June 23, 2025, CRCL stock surged nearly 25.38% intraday to $298.99, then retraced 11.89% from the peak to close 9.64% higher at $263.45. The decline in the stock price began during Monday’s session.
As of June 25’s close at $198.62, the sharp decline has wiped out nearly $24 billion in market capitalization, bringing CRCL’s valuation down from its June 23 peak of approximately $67 billion to $43.8 billion. The steep three-day drop has intensified investor concerns, especially after breaching the psychologically and technically significant $200 level. With Circle now trading below key moving averages and macro pressure mounting after the BIS report, many are questioning whether the correction could deepen further toward the $188–$190 zone, which marks the next critical support.
Also Read – CRCL’s USDC & FI’s FIUSD – The Stablecoin Business Model Everyone Should Understand
Here are seven key reasons behind Circle’s stock drop and what they mean for investors.
1. Downgrades from Major Banks Like JPMorgan
Circle Internet Group has faced significant headwinds due to downgrades from prominent financial institutions like JPMorgan. On the first day of Wall Street coverage, JPMorgan initiated its coverage of Circle with an Underweight rating, equivalent to a sell recommendation, citing an unjustifiably high valuation. Their $80 price target, which already factors in a premium for investor enthusiasm, signals a lack of confidence in the stock’s current price, contributing to its downward pressure as institutional investors reassess their positions.
2. Jim Cramer’s Bearish Commentary Undermines Investor Confidence
Jim Cramer, a widely followed market commentator, has publicly criticized Circle Internet Group, calling its current stock price “crazy” and unjustifiable by any measure. His vocal disapproval, combined with his influence among retail and institutional investors, has likely demoralized the market and eroded confidence in Circle’s valuation. Such high-profile bearish sentiment amplifies selling pressure, further driving the stock’s decline.
3. Sky-High P/E Ratio Signals Overvaluation
CRCL’s valuation metrics are eye-popping, even for a high-growth fintech. As of June 2025, the stock’s trailing P/E ratio stands at 237, far above the tech sector average of 30–40. This suggests investors are paying $237 for every dollar of earnings, a level that’s difficult to sustain without exceptional growth.
- Why It Matters: High P/E ratios indicate market optimism but also heightened risk. If Circle fails to meet lofty expectations, investors may sell off, driving the stock lower.
CRCL’s EV/EBITDA of 197.04 and price/sales of 31.02 further highlight its premium pricing, compared to peers like Coinbase.
4. Overstretched Price – 750% Rally Invites Profit-Taking
Since its IPO on June 5, 2025, at $31 per share, CRCL has skyrocketed 749.84%, outpacing the S&P 500’s 2.44% year-to-date gain. This parabolic run – driven by USDC’s growth, regulatory clarity, and the Fiserv deal – has stretched the stock’s valuation to unsustainable levels, inviting profit-taking.
- Why It Matters: Stocks with such rapid gains often face sharp corrections as early investors lock in profits. CRCL’s 80% rally in the week ending June 23, 2025, likely triggered sell-offs, as seen in yesterday’s 12% drop from $298.99.
My Insight: Analyzing historical IPO data, I’ve seen that gains above 500% in under a year often lead to 20-30% pullbacks, aligning with CRCL’s current trajectory.
Also Read – Important Facts to Know About USDC in 2025
5. Technical Analysis – A Gap That Was Destined to Be Filled, Following Classical Technical Chart Theory
Latest Update – CRCL Stock – Latest Technical Outlook
As anticipated, CRCL filled the gap between $206 and $200 on Wednesday, confirming a key technical expectation that had been building since last week’s sharp rally.
According to technical theory, such gaps – caused by frenzied buying – tend to be filled as the stock retraces to close the gap.
- Why It Matters: Technical traders see gaps as magnets for price action. The failure to hold above $250 signals bearish momentum, potentially driving CRCL lower.
My Insight: Studying CRCL’s candlestick charts, I noted the gap around $200–$206, which aligns with heavy selling pressure.
6. Cathie Wood’s Selling Sparks Investor Jitters
Cathie Wood’s ARK Investment Management, an early backer of Circle with a $150 million stake at its June 5, 2025 IPO, has been trimming its position, adding pressure to CRCL’s stock price.
Last week, ARK sold 1.25 million CRCL shares for approximately $243 million, followed by another 415,844 shares on Monday, June 23, 2025, for $109.6 million, reported by Cointelegraph. In total, ARK has offloaded about 1.7 million shares, representing 37% of the 4.5 million shares it purchased at IPO.
- Why It Matters: Wood’s moves, tracked via SEC filings and trade reports, often influence retail investors. The sale of 1.7 million shares – valued at over $352 million combined – signals potential skepticism about CRCL’s current valuation, prompting others to sell and amplifying today’s decline.
Despite the sales, ARK retains 2.6 million Circle shares, making it the third-largest holding across Wood’s ETFs.
My Insight: ARK’s pattern of reducing exposure after CRCL’s 750% post-IPO rally mirrors Wood’s past strategy with high-flyers like Tesla, balancing profit-taking with long-term conviction in Circle’s stablecoin-driven growth.
7. BIS Delivers Damning Verdict on Stablecoins in Tuesday Release
The fifth and most recent driver of CRCL’s accelerated selloff came from the Bank for International Settlements (BIS) – an influential global institution owned by 63 central banks.
In a press release issued Tuesday, the BIS dealt a fresh blow to Circle’s core business model, as reported by CoinDesk.
The report warned that stablecoins cannot reliably maintain one-to-one parity with central bank money, may struggle with liquidity under stress, and lack proper controls to prevent financial crime. While the BIS expressed support for tokenization and digital innovation, it clearly positioned central bank digital currencies (CBDCs) as the preferred path forward.- not privately issued stablecoins like USDC.
This public disapproval from the world’s top monetary coordination body has spooked investors and deepened fears that global regulators may tighten oversight on stablecoins. For Circle, whose USDC is its flagship product with over $61.9 billion in circulation, the report undermines its long-term vision of replacing traditional banking rails with private tokenized dollars. The timing of the statement, amid already intense downward pressure on CRCL, has only accelerated the stock’s selloff.
Is a Correction Toward $200 Inevitable?
Latest Update – CRCL Corrects to $200, Closes at $198.62 on Wednesday, June 25. The stock has now plunged more than 33% from its all-time high of $298.99 earlier in the week.
CRCL’s 14% drop to $226, reflects a confluence of factors: an overheated P/E ratio, profit-taking after a 750% rally, a technical price gap, and selling pressure from Cathie Wood’s ARK. While Circle’s fundamentals – such as USDC’s $2 trillion in annual transactions and the Fiserv partnership – remain strong, the stock’s valuation suggests continued downside risk.
- Bearish Case: A break below $250 could drive CRCL toward $210–$190, filling the technical gap and aligning with a more sustainable valuation.
- Bullish Case: New catalysts, like additional USDC partnerships or FIUSD’s successful launch, could push CRCL above $270, resuming its rally.
My Insight: Analyzing CRCL’s volatility, I see parallels with 2021 crypto stocks like Coinbase, which corrected 30% after similar runs. Investors should monitor $250 support and watch for macro crypto sentiment shifts.
Also Read – USDC vs. RLUSD vs. USDT – Key Differences and Why They Matter
This article is for informational purposes only and should not be considered financial advice. Investing in stocks, cryptocurrencies, or other assets involves risks, including the potential loss of principal. Always conduct your own research or consult a qualified financial advisor before making investment decisions. The author and publisher are not responsible for any financial losses incurred from actions based on this article. While efforts have been made to ensure accuracy, economic data and market conditions can change rapidly. The author and publisher do not guarantee the completeness or accuracy of the information and are not liable for any errors or omissions. Always verify data with primary sources before making decisions
Dawson Blake is a financial markets expert with over 10 years of experience, focusing mainly on stock market news and price movements. He aims to become a top-tier authority in curating stock news content that readers can trust as their go-to source for market information. Dawson enjoys breaking down market activity, company updates, and daily trends to help investors stay informed and make smarter financial decisions. His writing is simple, clear, and designed to make the stock market easy to follow for everyone.