Market analysts attribute Circle’s strong stock performance to overwhelming demand from institutional investors.
Analysts view these investments as a strategic bet on the rising demand for US dollar-pegged stablecoins. They also noted that the success signals a broader market recognition of stablecoins’ role in driving mainstream crypto adoption.
However, not everyone in the crypto community is celebrating. DeFi analyst Ignas voiced concerns that Circle’s success benefits traditional finance (TradFi) over on-chain users, who see no direct rewards from USDC’s growth.
“Crypto is amazing because it rewards early adopters: from BTC, ETH, to multiple airdrops. Yet, the upside from Circle’s success leaves onchain users sidelined. We got no base yield from USDC, no stocks, no airdrop… anything. Sure, we can buy CRCL with TradFi accounts but it siphons money from crypto to TradFi.”
Nonetheless, he conceded that Circle’s progress will spur on-chain transaction activity, boosting valuations for underlying blockchains.
