Wall Street analyst has a blunt warning on surging stock originally appeared on TheStreet.

Circle (CRCL), the public issuer of stablecoin USDC, saw its shares shrink as much as 8% on July 22, after Compass Point downgraded the stock from \\"Hold\\" to \\"Sell,\\" citing valuation concerns and increased competition in the digital asset market.

The firm also reduced its price target on Circle to $130, down from $205, which suggested a pullback after the company's huge post-IPO run.

At press time, CRCL was trading at $199.24, down 7.80% over the last day.

Circle stock has increased over 500% since launching on June 5, and Growth has been fueled by the energized market environment spawned by the introduction of the GENIUS Act, signed into law by President Donald Trump, which created a much more transparent regulatory framework for fiat-backed digital assets, legitimizing stablecoins and giving investors reason to be optimistic.

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As per reports, Compass Point analyst Ed Engel cautioned that this rally may be unwarranted. \\"Crypto investors often 'sell the news' following major legislative wins,\\" said Engel. He added that CRCL has seen such a dramatic run-up that a backtrack is possible.

$CRCL | ???????????????????????? (CRCL): Compass Point ???????????????????????????????????????? ???????? ????????????????, cuts ???????? ???????? $????????????.???????? (from $205.00)

Analyst sees ???????????????????????? ???????????????????????????????? ???????????????????????? & ???????????????????????????????????? ???????????????????????????????????????????? pressuring margins and ???????????????????????????????????? recalibration. pic.twitter.com/a51W6Evt7N

— Hardik Shah (@AIStockSavvy) July 21, 2025

He commented on the inevitable margin pressure resulting from increased revenue-sharing payments to distribution partners, as well as the incoming competition presented by traditional banks and fintech companies establishing their own stablecoins.

Circle's revenue primarily comes from the interest on short-term Treasury holdings that back USDC. Analysts are mindful of potential changes in returns on Treasuries resulting from changes in the Federal Reserve's monetary policy.

Seaport Research Partners raised its price target for Circle to $280 last week. They called Circle a \\"pure play\\" on stablecoins, designating it as one of the biggest beneficiaries of the new regulatory landscape.

Wall Street analyst has a blunt warning on surging stock first appeared on TheStreet on Jul 22, 2025

This story was originally reported by TheStreet on Jul 22, 2025, where it first appeared.