Circle’s stablecoin business is booming, but many investors ran for the exits in August anyway. Here’s what spooked them.
Shares of Circle Internet Group (CRCL -8.71%) took a 28.1% hit in August 2025, according to data from S&P Global Market Intelligence. The group behind the USDC (USDC 0.01%) stablecoin posted its first earnings report as a public company in the middle of the month, and it wasn’t strong enough to support Circle’s early price jump.
Circle’s earnings landed with a thud
From the initial public offering (IPO) on June 4 to the end of July, Circle’s stock had gained a hair-raising 492%. Investors were watching the first earnings report closely, looking for signs that Circle’s business could sustain a $42.0 billion market cap.
But that bullish outcome wasn’t in the cards. Sure, the results were impressive, given that Circle’s core business is based on an asset that will always be worth $1 per coin. Revenue rose 53% year over year to $658 million as the active circulation of USDC nearly doubled to $61.3 billion. But Circle still posted a net loss of $482 million in the second quarter, largely due to costs associated with the IPO. The price spike itself was the root cause of these charges, as the skyrocketing stock price changed the value of Circle’s convertible debt and stock-based compensation policies.
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The boring banking secret behind Circle’s exciting revenue
It may sound strange that Circle generated a $658 million revenue stream in the second quarter, even though the USDC stablecoin neither gained nor lost any value. But the company operates much like a classic bank — it earns interest on the dollar-based funds that provide direct backing for the stablecoin. These interest payments accounted for 96.4% of Circle’s total revenue in the second quarter.
As for the stock’s price drop, it should be noted that the slide started well before Circle’s earnings report. As of Sept. 2, Circle’s share price is down 54.4% from the absolute peak on June 23. The big surge followed by a steep price drop is pretty common for big-name IPOs, and Circle was one of the most anticipated market launches in recent memory.
Only CoreWeave (CRWV -9.23%) and Figma (FIG -6.70%) have seen splashier IPOs in 2025, and they have indeed followed similar charting patterns. Figma’s stock is down 46.2% from a soaring peak just after its IPO in July, while CoreWeave took a couple of months to build a 359% gain and then lose nearly half of it.
I rarely jump on IPO launches, because early investors tend to get burned rather quickly. Circle provided yet another example of a well-worn charting drama. And I’m not entirely convinced that Circle’s cool-off period has ended yet. You should probably avoid this red-hot financial technology stock until it stabilizes at a more plausible valuation.
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
