Circle, the issuer of the USDC stablecoin, saw its shares fall more than 20% on Tuesday, closing at $101.24 under the ticker CRCL. The stock continued to slide in after-hours trading. Shares of crypto exchange Coinbase, which has close ties to Circle, also dropped nearly 10%, finishing the session at $181.04.
One factor weighing on Circle was an announcement from stablecoin rival Tether, issuer of USDT, the largest stablecoin by market capitalization. Tether said it had agreed to undergo a full audit by an unnamed firm from the so-called Big Four accounting groups. The move is seen as one of the final steps toward compliance with the U.S. GENIUS Act, potentially positioning Tether as a stronger domestic competitor to Circle going forward.
Uncertainty surrounding a separate piece of legislation also appeared to weigh on sentiment. The proposed Clarity Act market structure bill, still under revision in Congress, includes language on stablecoin yield that has drawn attention from both crypto lobbyists and the banking industry. Compromise language drafted by Senators Alsobrooks and Tillis and the White House was under review by the banking lobby as of Monday. Reports indicate the revised language could permit yield on staked stablecoins, which some in the crypto industry view as a meaningful concession.
The debate over stablecoin yield has significant implications for exchanges that currently offer rewards on USDC balances. Coinbase has been offering 3.5% rewards for USDC held on its premium Coinbase One platform, having ended its rewards program for standard users in December, when it had been advertising 4.5% for Coinbase One members. Competitor Kraken offers up to 5% on USDC balances, while Binance, the largest centralized crypto exchange by volume, pays users 5.63% on USDC held in its wallets. Binance previously issued its own stablecoin, BUSD, but ceased minting new tokens after its issuing partner Paxos faced regulatory action from New York authorities over alleged due diligence shortcomings.
Despite Tuesday’s sharp decline, analysts have maintained a broadly positive outlook on Circle. The company’s shares had gained approximately 170% since early February, significantly outperforming other crypto-related stocks and the broader market. Last week, Clear Street analyst Owen Lau raised his price target for CRCL to $152, citing Mastercard‘s $1.8 billion acquisition of BVNK, a stablecoin payments infrastructure company, as a bullish signal for the sector.
Much of Circle’s earlier stock surge was driven by a strong earnings report. The company reported 72% growth in USDC supply to $75.3 billion and 77% revenue growth to $770 million in the fourth quarter of 2025, a result that triggered a 35% single-day gain in its shares. A higher-for-longer interest rate environment, reinforced by geopolitical tensions and rising oil prices, had further supported Circle’s earnings outlook, as the company earns substantial interest on the reserves it holds to back USDC.
As of the time of the source reporting, more than $78 billion worth of USDC tokens were in circulation, with an equivalent value in cash or cash-equivalent investments held in reserve by Circle. The combination of legislative uncertainty and competitive pressure from Tether’s audit announcement appears to have prompted investors to reassess the company’s near-term prospects, even as its underlying fundamentals remain strong.
Originally reported by Decrypt.
