Circle stock extends stunning rally amid high hopes for crypto 'disruptor'
Circle (CRCL) stock's massive rally is showing no signs of cooling.
The issuer of USDC stablecoins (USDC-USD) soared roughly 15% in morning trading on Friday, extending its stunning post IPO gains as Wall Street bets big on the crypto player.
"Circle as a top-tier crypto 'disruptor' with a sizeable future opportunity," Seaport Research Partners analyst Jeff Cantwell wrote in a note on Friday. He said that the company would benefit from an improving regulatory climate in the US.
"We think the overall stablecoin 'market cap' will reach $500B by the end of next year; longer-term, we think it ultimately can reach $2T," he added.
Cantwell initiated Circle with a Buy rating and a price target of $235. Shares hovered near $228 each during Friday's rally. The stock is on track to close out the week up more than 65%. Shares are up more than 600% above their IPO price of $31.
Circle surged on Wednesday following the Senate's passage of the GENIUS Act, legislation that provides a federal framework for stablecoins, tokens backed by assets, such as the US dollar.
"History is being made, as the US Senate passes the GENIUS Act, taking us one step closer to breakthrough legislation being signed into law that will drive US economic and national competitiveness for decades to come," Circle co-founder and CEO Jeremy Allaire said on X following the bill's passage.
Read more about Circle's stock moves and today's market action.
Circle issues the stablecoin USDC, which stands for USD coin and is backed by the dollar. The company makes most of its revenue from "reserve income," which is what it makes on cash backing its stablecoin that is held in banks or invested in Treasury bills.
Momentum surrounding stablecoins also sent shares of trading platform Robinhood (HOOD) and crypto exchange platform Coinbase (COIN) higher in recent weeks. Coinbase holds a minority stake in Circle.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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