Stripe · Circle · Coinbase · The Block
Circle shares sink 16% after Open USD reveal, analysts say fears are ‘overblown’
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Circle shares fell more than 16% on Tuesday after Open Standard announced Open USD, a new stablecoin backed by more than 140 companies including Visa, Stripe, Mastercard, BlackRock and Coinbase, as investors weighed the potential competitive threat to USDC.
Key facts
- We see competitive concerns as overblown," analysts Andrew Jeffrey and Adib Choudhury wrote, pointing to USDC's roughly $74 billion market capitalization, deep liquidity and Circle Payments Network
- Circle shares fell more than 16% on Tuesday after Open Standard announced Open USD, a new stablecoin backed by more than 140 companies including Visa, Stripe, Mastercard, BlackRock and Coinbase
- Paolo Ardoino, CEO of primary Circle rival Tether, struck a similar tone on social media Tuesday, saying "Welcome OUSD
- But Jeffries and Choudhury argue that Circle already offers similar incentives to partners and that OUSD is "a solution searching for a problem
Summary
Analysts at William Blair said the sell-off was an overreaction, arguing that Circle's first-mover advantage, liquidity and payments infrastructure leave it well positioned despite a high-profile rival like OUSD. In a research note, William Blair reiterated its Outperform rating on Circle and said investors should view the rout as an opportunity to buy. "We see competitive concerns as overblown," analysts Andrew Jeffrey and Adib Choudhury wrote, pointing to USDC's roughly $74 billion market capitalization, deep liquidity and Circle Payments Network, the company's stablecoin payments infrastructure. The pair were also skeptical of Open Standard's pitch.