Circle Rebounds 50% From Early August Low: How Is the Market Reading It?

Over the past week, Bitcoin surged more than 20%, and crypto-related stocks in the U.S. market rode the wave higher. Circle, which had been plagued by negative news, has been particularly impressive lately. Its stock price, which briefly fell to around $57 in early August, has now climbed back to around $87.

Cathie Wood stated in her latest tweet: As technology disrupts the traditional world order, Circle will be a major beneficiary. This statement has reignited market expectations for Circle.

1. Recap: Why Was Circle Hit Before?

The trigger for Circle's sharp decline was the direct entry of OpenUSD.

On June 30, the Open Standard Alliance, comprising over 140 payment, banking, technology, and crypto companies including Visa, Mastercard, Stripe, BlackRock, Google, and Coinbase, announced the launch of the stablecoin OpenUSD (OUSD), expected to go live within the year. Its approach directly targets Circle's core: under the traditional model, interest generated from stablecoin reserves goes entirely to the issuer, while OpenUSD plans to distribute this interest proportionally to channels and ecosystem partners, with zero fees and no caps on minting and redemption. On the day of the announcement, Circle's stock price plummeted about 17%.

Simply put, the market's bearish logic on Circle was straightforward: the company's business is too singular—issuing USDC and earning reserve interest. This business has no moat, and once a competitor like OpenUSD enters with a "profit-sharing model," the stock price would be hit first.

2. Cathie Wood's Bullish Logic: You're Using Old Maps to Find New Lands

If Circle were truly just a "dollar stablecoin interest-earning company," its prospects would indeed be limited and unable to support a high valuation.

But the core argument in Cathie Wood's tweet is that the market is still pricing Circle using the framework of the Visa and Mastercard era, while Circle may be participating in creating the next generation of payment and financial infrastructure. In other words—you've been measuring with the wrong ruler from the start.

So what are the specific explosive points in this "next-generation infrastructure" narrative?

3. Arc Chain and CCTP: Infrastructure Already Underway

For the narrative of building next-generation payment and financial infrastructure, Circle indeed has some already-implemented projects.

The first achievement is Arc—Circle's self-developed Layer 1 dedicated blockchain, specifically designed to host USDC and on-chain financial transactions. Its design is ingenious: on general-purpose chains like Ethereum and Solana, transaction fees must be paid in ETH or SOL, but on Arc, transaction fees are settled directly in USDC, so users no longer need to buy other tokens just to spend dollars. Arc is built for large financial institutions, with built-in compliance frameworks and KYC verification, essentially creating a highly regulated financial private network. This project has already gained support from many traditional financial institutions, with JPMorgan making a significant investment.

The other is CCTP (Cross-Chain Transfer Protocol): through a "burn and mint" mechanism—burning on chain A and minting an equivalent amount on chain B—native USDC can move seamlessly across dozens of public chains without going through third-party cross-chain bridges, thus avoiding the common problem of bridge hacks.

With a dedicated chain and a cross-chain protocol, Circle is transforming itself from a "coin issuer" into an "internet-native financial operating system."

4. AI Agents: A Demand Curve No One Has Priced Yet

There is an even more distant imagination: AI Agents.

Machines naturally prefer payment methods that are low-cost, real-time, globally accessible, programmable, and API-native—features that seem tailor-made for stablecoins. When the machine economy of Agent-to-Agent and Machine-to-Machine transactions takes off, every automatic settlement between AIs could represent a brand-new demand curve for stablecoins.

5. Final Thoughts: Big Imagination, But Homework Not Yet Done

Finally, we must be honest. Most of the above stories are still in the narrative stage—Circle has not yet delivered enough results to prove that it has truly built the next generation of payment and financial infrastructure. The imagination is vast, but the actual deliverables are relatively limited.

So if you want to invest in Circle now, the right mindset is not to bet on it doubling next month, but to treat it as a long-term infrastructure option: be prepared to hold for the long term, manage position size reasonably, and let time turn the narrative into reality.

What Cathie Wood is bullish on is never the next quarter's earnings, but the financial rails of the next decade. Whether you follow depends on your time horizon.

This article is independently written by a guest author and represents only the author's personal views and analysis. It does not represent the official position of BIT and does not constitute any investment advice, offer, or solicitation. Crypto assets and related securities are highly volatile, and investors may face the risk of principal loss. Past performance does not guarantee future returns. Please assess risks yourself and consult professional advisors before investing.