Circle shares plunged 18% on news of a rival stablecoin backed by Visa and Coinbase but rebounded slightly as analysts deemed the sell-off unwarranted.
Circle (CRCL) shares tumbled 18% Tuesday following the announcement of Open USD, a competing stablecoin backed by Visa, Mastercard, and Coinbase. The decline extended a broader downturn, leaving shares 75% below their 52-week high despite a 3% recovery Friday.
Analysts at Clear Street argued the sell-off was overdone, noting Open USD lacks evidence of market traction. They compared it to other stablecoins that failed to gain significant share, emphasizing USDC’s resilience amid past competition. Circle CEO Jeremy Allaire highlighted USDC’s “massive scale” as a key advantage over new entrants.
The narrative threat from Open USD may persist ahead of its launch later this year, but analysts see limited near-term risk to Circle’s dominance in the stablecoin market.