Came in with a bang, dropped just as fast... US No.1 stock 'Circle' plunges over two days
Summary
- It was reported that Circle, a stablecoin issuer, saw its stock price plummet 26.28% in just two days.
- Recently, concerns over the institutional acceptance of stablecoins and significant selling by ARK Investment Management were said to have undermined investor sentiment.
- Circle was identified as the top stock bought by Korean investors on the US stock market this month.
The share price of the stablecoin issuer Circle has plummeted nearly 30% in just two days. Concerns over the institutionalization of stablecoins and news of major investors offloading shares have acted as negative factors.
On the 25th (local time), Circle’s stock closed at $198.62, down 10.79%. The previous trading day, the 24th, it fell 15.29%, dropping 26.28% over the past two sessions. Since Circle went public on the 5th at an IPO price of $31 and rose to $263.45 by the 23rd of this month, its price had skyrocketed 749.84%. The surge was attributed to growing expectations for legalization after the US Senate passed the stablecoin regulation bill, the GENIUS Act.
Recently, negative evaluations on the monetary system of stablecoins have caused the stock price to turn bearish. On the 23rd, Trevor Williams, a researcher at Jefferies investment bank, said, "It is highly doubtful that stablecoins will become a mainstream payment instrument in the United States," and, "There is no reason found to replace the current card system, which has significant rewards." The Bank for International Settlements (BIS) also pointed out in a draft of its annual report, to be published on the 29th, that "stablecoins are not fully guaranteed to be exchangeable at par with the dollar" and "there is a high likelihood of abuse in illegal activities such as money laundering." While they may play a supplementary role in the financial system, BIS evaluated they fail to meet the core requirements as currency.
Additionally, investor sentiment was dampened by news that ARK Investment Management, led by CEO Cathie Wood—nicknamed ‘Money Tree Sister’—had started taking profits. Over the last four trading days, ARK sold 1.5 million Circle shares worth about $333 million (approx. ₩460 billion).
Circle is currently the most popular US stock among retail Korean investors this month. According to the Korea Securities Depository, Circle ranked No.1 in net buying by domestic investors in the US stock market through the 25th of this month. During the 15 trading days since listing, investors purchased $442.95 million (approx. ₩602.3 billion) worth of Circle shares.
Reporter: Jo Ara rrang123@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
