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- CRCL shares fell 18% on Tuesday amid news of a major stablecoin launch later this year.
- Despite this, analysts at Clear Street don’t believe the launch – which has the backing of backers such as Visa, Mastercard and Coinbase – warrants the reaction.
- Shares rebounded 3% on Friday but are still 75% below their 52-week high.
Stocks in USDC Stable coin Source circuit (CRCL) It fell 18% on Tuesday amid news of the launch of a competing stablecoinOpen USD, from global partners such as Coinbase, Visa and Mastercard – but analysts at Clear Street believe the market move was an overreaction from investors.
“While OUSD has strong partners like other leading stablecoins, without any solid evidence that OUSD can gain real momentum, the sell-off looks overdone,” the analysts wrote in a note on Wednesday.
Ahead of the launch of OUSD later this year, analysts believe the narrative threat may remain. But the circle US dollars The stablecoin has maintained its viability in the face of other stablecoin launches.
“Although the narrative will continue, CRCL has maintained strong market shares despite the constant emergence of new stablecoins,” they wrote. “Our initial assessment is that OUSD is no different from USDG (the global dollar network stablecoin) which has not gained significant market shares.”
Jeremy Allaire, CEO of Circle, provided some perspective on the OUSD launch at the request of investors, ultimately highlighting the strength of his company and the “tremendous scale” of the USDC network today – something OUSD will not have at launch.
According to Aller, robust stablecoin networks need a wide range of services and applications, strong liquidity, and “deep integration with the policy and regulatory environment.”
“All of these investments by Circle and our global ecosystem of thousands of partners have achieved the end result of providing the most reliable and available digital infrastructure in the world.” He posted on XAdding that his company “does not intend to slow down.”
Currently, USDC is the second largest stablecoin and fifth largest token overall with a market capitalization of over $73 billion. Only Tether’s USDT beats it in the stablecoin rankings with a market capitalization of $184 billion.
Circle shares rebounded somewhat on Wednesday, rising 3 to trade around $64.55. However, CRCL is involved, The prices of which rose significantly upon its public appearance last yearis down more than 18% in the past six months and more than 75% from its 52-week high of $262.97.
In its note issued Wednesday, Clear Street reached a 12-month price target for the company at $157 — representing a nearly 140% upside from Wednesday’s trading price.
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