Circle (CRCL) Stock Downgraded to Sell by Compass Point

by MarketNewsData

🔻 Stock close down at $198.31 -17.55 (-8.13%) Heavy selling pressure extended from Monday’s 3.4% drop

📉 Analyst Downgrade

  • Firm: Compass Point
  • Action: Downgraded CRCL from Neutral → Sell
  • New Price Target: $130 (cut from $205)
  • Rationale:
    • Rising regulatory risk around stablecoins
    • Concern over shrinking interest income from USDC reserves
    • Traditional banks seen as new competition for digital dollar issuance

⚖️ Regulatory Overhang

  • Senate Banking Committee unveiled a draft stablecoin bill:
    • Would impose stricter oversight and reserve rules
    • Pushes for interest income sharing with users
    • Could limit profitability for USDC and similar products

💬 Analyst Note Excerpt (Compass Point)

“Circle’s upside from USDC float is at risk. Legislative momentum could level the playing field with banks — margin compression is likely.”

🔁 Recent Trend

  • CRCL is now down 34% from June highs (~$299)
  • Today’s move erases breakout gains from earlier this summer

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