Circle Downgraded to ‘Sell’ Amid Stablecoin Legislation Fallout

Circle (CRCL) shares plunged 8.23% to $198.31 after Compass Point downgraded the stablecoin issuer from 'neutral' to 'sell,' citing regulatory headwinds and competitive pressures. The stock has retreated 34% from its June peak of $298.99.

Analysts project a $130 price target, anticipating continued volatility following the GENIUS Act's passage—the first major U.S. crypto law establishing stablecoin frameworks. 'Crypto markets routinely price in legislation early and sell afterward,' noted Compass Point, highlighting shrinking retail interest and Fed policy as additional risks.

The legislation, signed July 18, failed to buoy Circle despite providing regulatory clarity for dollar-pegged tokens. Market reaction underscores the divergence between policy milestones and immediate investor sentiment in digital asset markets.