Shares in USDC stablecoin issuer Circle (CRCL) fell 18% on Tuesday amid news of a competing stablecoin launch, Open USD, from global partners like Coinbase, Visa, and Mastercard—but analysts at Clear Street think the market move was an overreaction from investors.
“While OUSD has strong partners similar to other leading stablecoins, without any solid evidence that OUSD can get real traction, the selloff looks overdone,” analysts wrote in a Wednesday note.
Ahead of OUSD’s launch later this year, analysts believe the narrative threat may remain. But Circle’s USDC stablecoin has maintained its staying power in the face of other stablecoin launches.
“While the narrative will linger, CRCL has maintained strong market shares even though new stablecoins continuously arise,” they wrote. “Our initial assessment is OUSD is not dissimilar to USDG (Global Dollar Network stablecoin) which hasn't gained meaningful market shares.”
Circle CEO Jeremy Allaire provided some perspective about the OUSD launch at the request of investors, ultimately highlighting his firm’s strength and the “massive scale” of the USDC network today—something OUSD won’t have at its launch.
According to Allaire, strong stablecoin networks need a wide range of services and applications, strong liquidity, and a “deep integration with the policy and regulatory environment.”
“All of these investments by Circle and our global ecosystem of thousands of partners have delivered the net result of providing the world’s most trusted and available digital dollar infrastructure,” he posted on X, adding that his firm does “not intend to slow down.”
As it stands, USDC is the second-largest stablecoin and the fifth-largest crypto token overall with a market cap of more than $73 billion. Only Tether’s USDT stands above it in the stablecoin rankings with a $184 billion market cap.
Circle shares have bounced back some on Wednesday, gaining 3 to change hands around $64.55. Nevertheless, CRCL shares, which skyrocketed in price upon their public debut last year, are down more than 18% in the last six months and are more than 75% off their 52-week high of $262.97.
In its Wednesday note, Clear Street arrived at a 12-month price target for the firm at $157—a roughly 140% gain from its Wednesday trading price.
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