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Tesla’s robotaxi launch this week couldn’t come sooner, especially given Elon Musk’s fallout with President Trump that dented the stock.
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Quadrupling in value
More gains are in store for stablecoin issuer Circle (CRCL) following a strong IPO debut this past Thursday. After pricing shares at $31, the stock more than doubled in its first day of trading, and then climbed 30% on Friday to end the week at $107.70. It’s now up another 12% in premarket trading to more than $120/share, as investors continue to bet on new forms of money, payment transfers and the future of the financial system. Big U.S. banks explore possibility of issuing joint stablecoin
What’s a stablecoin? Compared to volatility-prone cryptocurrencies like bitcoin (BTC-USD), which can appreciate or depreciate rapidly in value, stablecoins offer the ability to complete a transaction at a “stable” price. Not all are created equal (remember the Terra meltdown?), but the one being offered by Circle – known as USDC (USDC-USD) – is pegged to the U.S. dollar. Think of it as casino chips for the crypto world, or the digital version of cash that lives on the blockchain. Check out Circle’s other product offerings
These tokenized dollars issued by Circle maintain an equal level of greenback reserves to support the currency’s peg (fiat collateralization). Circle makes money by investing most of these reserves in short-term liquid Treasuries, thereby generating interest income, while its holdings now amount to tens of billions of dollars. In terms of overall usage, Ark Invest estimates that stablecoins even overtook Visa (V) and Mastercard (MA) in transaction value in 2024, though those volumes can also reflect repeated transfers between wallets, bot trading, or other arbitrage opportunities. Is the stock a Buy?
The excitement: Offering another ramp for mainstream finance to get into crypto, Circle (CRCL) is the first major IPO in the crypto industry since Coinbase (COIN) in 2021. USDC stablecoins can be transferred at the speed of the internet, with transaction costs at fractions of a cent that can settle almost instantaneously. Circle has also welcomed regulation in all of the countries that it operates, like the GENIUS Act that is making its way through the U.S. Congress. This has assured many investors about the efficiency of stablecoin markets, which have caught on as a way for companies to pay workers around the world, or for conducting peer-to-peer transactions. Take the WSB survey.
Worries and concerns? Check out some key risks flagged by SA Analyst Mike Fay in Circle Internet Group IPO: A Bet On Fiat Survival Through Stablecoins.
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