- Circle‘s stock (CRCL) plummeted 20% on Tuesday, erasing recent gains.
- Rival Tether announced a major audit deal with a ‘Big Four’ firm, posing a new competitive threat.
- Lawmakers are reviewing compromise language in the Clarity Act that may restrict stablecoin yield, impacting a key revenue stream.
- The declines came after a period of strong performance, including a 170% gain since February.
Circle saw its stock price crash by 20% on Tuesday, hitting investor confidence in the prominent stablecoin issuer after a period of remarkable growth. The sharp decline for CRCL shares, which closed at $101.24, coincided with two significant market developments potentially concerning for Circle.
Consequently, shares of the closely linked Coinbase also fell nearly 10% on the same day. This sell-off followed a recent surge where Circle‘s stock had gained 170% since early February, far outpacing the broader market.
However, Circle now faces heightened competition after rival Tether announced a long-awaited agreement for a full audit by a “Big Four” accounting firm. This move by the issuer of the largest stablecoin, USDT, represents a major step toward U.S. regulatory compliance, making it a more formidable domestic competitor.
Meanwhile, legislative uncertainty added to the pressure as lawmakers reviewed compromise language for the proposed Clarity Act market structure bill. The language, currently under review by the banking lobby, could impact rules around stablecoin yield, a feature offered by exchanges like Coinbase and Kraken.
This potential regulatory shift comes as exchanges use yield to attract users, with USDC” target=”_blank” class=”sc-adb616fe-0 bJsyml”>Coinbase offering 3.5% rewards and Kraken offering up to 5% on USDC balances. The recent downturn starkly contrasts with Circle‘s recent blowout earnings, which showed 72% growth in its USDC stablecoin to $75.3 billion and 77% revenue growth to $770 million in Q4 2025.
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