“The USDC steiblcoin issuer Circle may undergo significant financial pressure if the Fed reduces the key rate as a result of the September meeting. This was stated by Dragonfly investor under the pseudonym Omar. This Will Play Out in the MONTHS AHEAD, But INTEREST RATE CUTS Are Horrendous for Rate Sensitive Names Like Circle- […]”, – WRITE: Businessua.com.ua
USDC Stablcoin Issuer Circle may undergo considerable financial pressure if Fed will reduce the key rate on the results of the September meeting. He stated it Dragonfly investor under the pseudonym Omar.
This Will Play Out in the MONTHS AHEAD, But INTEREST RATE CUTS Are Horrendous for Rate SenSitive Names Like Circle
-A 100bps Cut Slashes Run Rate Gross Revenue by $ 618m (-23%), Gross Profit $ 303M (-30%), and Margins 3.3%
– Valuation Wise, Takes An Expensive Stock Trading at 42X… https://t.co/7lbpyudfk3 pic.twitter.com/fsplbdudud8n– OMAR (@Teoneandomsy) August 13, 2025
The key source of Circle income is percentage of US Treasury bonds, which provide its steiblcoin. Reducing the Fed rate will reduce the profitability of these assets and, accordingly, the company’s profit.
Currently, almost 93% of market participants are expecting a regulator monetary policy.
Source: CME Fedwatch.
OMAR estimates that a reduction in 100 base points will reduce Circle annual income by $ 618 million and gross profit by $ 303 million.
Such a step will also reduce profitability, while increasing the cost of the company’s shares by 50%. To compensate for the loss, the issuer will have to increase USDC issue by $ 28 billion – 44% of the current $ 64 billion.
The Martyparty Analyst has suggested that Circle has been launching its own blockchain ARC can be preparation for the fall in profits. This will allow the company to “monetize transactions”. Currently, steiblcoin works on the networks of other blockchains, including Ethereum and Tron, and the translation commissions are received, not Circle.
In addition, the company announced the launch of the Circle Payments Network (CPN) payment system.
On August 15, it became known that the issuer will place 10 million shares in the secondary market at a price of $ 130 apiece – four times more expensive than during IPO In June, Coindesk writes.
We will remind, in July Circle applied for a license of the trust bank in the United States.
The gun
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