Circle stock price remains under pressure as Wall Street investors wait for its first financial results as a publicly traded company. CRCL was trading at $160, down sharply from the all-time high of $298.86 and 153% above its lowest point after the highly successful IPO.
Circle Internet Earnings Preview
Circle Internet Group will be the top company to watch on Tuesday as it releases its financial results for the second quarter.
These results will offer further insight into the company’s business operations following Donald Trump’s signing of the GENIUS Act into law, as well as the management’s efforts to drive business growth.
Wall Street analysts expect the company’s revenue to come in at $644 million, with the most optimistic analyst expecting its figure to be at $656 million.
Circle’s revenues are relatively straightforward to predict, as the company generates most of its income from interest on government bonds.
It now has over $65 billion in assets, while one-month bond yields are at 4.3% and ten-year bond yields are at 4.72%. This translates to a maximum annual revenue of approximately $2.7 billion, resulting in a quarterly revenue of $698 million.
The average earnings estimate of 4 analysts is that its earnings per share (EPS) will be 34 cents and its annual figure will be $1.31.
Circle Internet Faces Major Risks
The risk for Circle is that the odds of interest rates falling have jumped in the past few days after the US published weak nonfarm payroll data, which showed that the economy added just 73,000 jobs in July as the unemployment rate rose to 4.2%. Lower interest rates will affect its revenue as long as the stablecoin supply growth continues to decelerate.
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Worse, Donald Trump will select the next Federal Reserve chairman either this year or in 2026. The next chair, who will replace Jerome Powell, is likely to favor cutting interest rates, which will affect the central bank’s revenue growth.
The main difference between Circle and banks lies in their operational methods. Banks receive customer deposits and then lend them to individuals and companies at a higher interest rate. On the other hand, Circle receives the funds, and, according to the GENIUS Act, it can only invest in short-term government bonds. It lacks additional avenues to generate other income.
The only option is the Circle Payment Network, which it hopes will ultimately disrupt the SWIFT network, which handles trillions of dollars a year. CPN leverages the USDC stablecoin to simplify how people move money. This is unlike SWIFT, which uses concepts like intermediary banks for handling these transactions.
The other risk is that Circle is highly overvalued, given its market capitalisation of $35 billion, which is a high figure considering its main asset has a supply of $65 billion.
Circle Stock Price Technical Analysis
The other risk is that the CRCL stock price has formed a highly bearish double-top chart pattern, whose neckline is at $171.07. A double-bottom is one of the most bearish chart patterns in technical analysis.
Therefore, the stock will likely continue falling as it has also formed a bearish flag chart pattern on the 4-hour chart. If this happens, the next key level to watch will be at $150, the lower side of the pennant pattern.
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