Dragonfly investors: Interest rate cuts are a disaster for Circle, with significant declines in revenue and profits Dragonfly investor Omar tweeted that a rate cut is undoubtedly terrifying for companies like Circle that are sensitive to interest rates. A 100 basis point interest rate cut will result in a decrease of $618 million (-23%) in Circle's total revenue, a decrease of $303 million (-30%) in gross profit, and a 3.3 percentage point decline in profit margin. In terms of valuation, this requires raising a high priced stock traded at 42 times EV/rr gross profit to 60.4 times (approximately a premium of 50%). To offset the impact, an increase of $28 billion in USDC supply (approximately 44% of the current $64 billion) is needed to maintain neutrality. Omar said that a rate cut is imperative, which is why he saw Circle make a massive stock sale of about $1.5 billion yesterday, and why Circle is eager to launch products that will monetize trading flows (CPN and Circle Chain).