Sam Badawi
Stock Analyst, Creator of Origins of Alpha & Quarterly Conviction
Circle faces a senior management transition without a clear replacement after its CFO resigned abruptly, a risk not worth ignoring. Capital is better kept in the highest-conviction areas, semiconductors and AI infrastructure, though the medium-term view on bitcoin stays bullish and this call could prove wrong. x.comÂ
Bitcoin is a better buy than Circle, whose shares trade along with Bitcoin anyway. Circle also carries policy risk, which makes it a stock not worth backing. x.comÂ
Circle's valuation is far too high to consider right now, given risks from crypto sentiment and margin pressure. That holds despite strong momentum: Q4 revenue rose 77% to $770M with a solid EPS beat, it has launched institutional payment platforms and expanded African partnerships, and potential US stablecoin legislation is a tailwind. x.comÂ
Circle is building a network-effect moat by tying the biggest exchanges and payment players to USDC, to compete as the default settlement asset in trading and payments. Its deeper Binance deal is now its only exchange tie combining equity, incentive fees and wallet integration, second only to Coinbase. Coinbase, Binance and Hyperliquid hold where money sits; Intuit, JCB, Nium and Tazapay move it; CPN and Arc aim to settle it. Dominance isn't secured yet, and rivals are expanding too. x.com x.comÂ
Circle's earnings were the first fintech report this season that disappointed, making the stock one to sell to a greater fool while the market stays bubbly. x.comÂ
Coinbase remains a buy-the-dip crypto holding, but now ranks behind Circle. It has lagged amid prolonged CLARITY Act uncertainty, faces revenue risk from the ongoing USDC custody renegotiation with Circle, and miners shifting to AI temper the trading-volume outlook. Circle is the preferred stablecoin exposure because stablecoins are the natural payment rail for AI agents. Basket weights stay unchanged, with a lean toward adding to Circle as the highest-conviction name. x.comÂ
Circle looks set to turn back into an uptrend from a massive weekly base, with insider selling pressure likely exhausted. Nearly two years after the IPO, insiders and VCs who wanted to sell are probably gone, and the crypto theme is hot. x.comÂ
Circle faces pricing pressure because stablecoin infrastructure has low barriers to entry, which is why it stays an underweight with only small exposure. The risk showed when Circle fell 13% as Stripe, Coinbase and BlackRock backed a rival stablecoin, Open USD. x.com x.comÂ
Coinbase's fundamental and technical stories now match, as Circle's leadership has changed sentiment for crypto names and wider crypto access connects directly to Coinbase's platform. The stock is showing relative strength against Bitmine and Strategy, with an undercut-and-reclaim of its daily 9/50 EMA cluster heading into FOMC that could produce a good move. x.comÂ
Circle is the preferred stablecoin exposure because stablecoins are the natural payment rail for AI agents, a structural driver distinct from trading hype. It also benefits from interest-rate sensitivity and offers attractive asymmetry after its pullback, making it the highest-conviction name in a buy-the-dip crypto basket. Coinbase is de-prioritized on CLARITY Act uncertainty and revenue risk from its USDC custody renegotiation with Circle, while Robinhood is held at lower conviction. x.comÂ
Circle's long-term multi-bagger thesis, that USDC becomes a key part of next-generation payment rails, no longer looks on track. In just the past few days, 140 entities, including many major names, partnered with OUSD, and Robinhood announced a 7% yield program via USDG. Circle can still be a successful business, and its fall to the targeted ~$64 entry level looks justified by fundamentals, so the 'Circle is poised to dominate' case is crumbling. x.comÂ
