Key Takeaways
- Circle fell 9.3% on Friday after a record $6.3 billion theft at Binance, an exchange it expanded its partnership with in September.
- Circle and Tether froze $2.38 billion of assets, a sharp turn from April, when Circle was sued for failing to freeze funds in the Drift hack.
- The bigger issue is rates: Circle’s reserve return fell 66 basis points to 3.5% in Q2, and revenue missed estimates.
- Circle reports on November 4, where analysts expect about $740 million of revenue and USDC near $74 billion.
Circle Internet Group (CRCL) dropped 9.3% to $73 on Friday after a record $6.3 billion heist at Binance.
Circle has a stake in that story. It signed an expanded strategic partnership with Binance on September 17.
Coinbase (COIN) fell as well, as crypto-linked stocks sold off on the theft. It’s also Circle’s most expensive partner: Circle paid Coinbase $324.6 million in the second quarter alone, about 46% of its revenue.
This time, Circle moved fast. Along with Tether, it froze $2.38 billion of assets after Binance reported the incident.
Faster on the freeze this time
That response matters because of what happened earlier this year:
- In April, Circle drew heavy criticism for failing to freeze USDC as attackers drained an estimated $280 million from Drift.
- A Missouri crypto user then filed a proposed class action over it.
- Tether gained goodwill from the episode, and its USDT carried a $185 billion market cap at the time versus $78 billion for USDC.
So the Binance freeze helps repair Circle’s reputation with the institutions it wants as customers. CEO Jeremy Allaire said the company was closely tracking reports of an exploit as the news broke.
Yet the market sold first. The stock was already shaky before the hack…
Shares sit 48% below the 52-week high of $140, though still about 45% above the $50 low.
Yields matter more than hackers
The harder problem sits in the income statement. Q2 revenue and reserve income rose 7% to $701 million, missing the $717.5 million consensus.
Average USDC circulation grew 25%. However, the reserve return rate fell 66 basis points to 3.5%, which ate most of that growth. USDC also ended Q2 at $73.3 billion, down from $77 billion a quarter earlier.
Circle is working to diversify. It roughly doubled its 2026 other-revenue guide to $310 million to $330 million on a $242 million Arc token presale, and revenue less distribution costs grew 15% to $289 million.
Still, growth is set to cool sharply.
Analysts expect about 18.5% annual revenue growth over the next two years, down from a 52.7% pace over the last three.
TIKR tracks 29 analysts on Circle Internet Group. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Circle Internet Group, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Circle Internet Group’s Analyst Ratings
Paying 56x for rate exposure
So what does a 56.1x forward multiple buy here?
Less than it seems. Consensus has 2028 EPS at $1.91, still below 2025’s $2.35.
Reserve income was 95% of Q2 revenue, so every Fed move flows straight to Circle’s top line. Meanwhile, a CFO transition is underway, and operating expenses are tracking the high end of the $570 million to $585 million range to fund AI and Arc work.
Wall Street’s average target of $107 implies 48% upside.
My take: Circle handled the Binance hack well, and that should help with regulators and banks. But I don’t think it changes the numbers. Circle still earns almost everything from interest on reserves, and with EPS shrinking, 56x needs USDC growth to outrun falling yields. I’d wait for that proof before buying this dip.
November 4 is the checkpoint. Analysts want revenue near $740 million and USDC holding near $74 billion. Because Q3 closed before the hack, management’s comments on October USDC flows will matter just as much.
So what is Circle Internet Group stock actually worth?
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Disclaimer:
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