In a landmark event for the cryptocurrency industry, the U.S. senate this week passed legislation that would create a regulatory framework for stablecoins - a type of digital token whose value is tied to an actual asset such as fiat money or gold. The so-called GENIUS Act could lead to stablecoin issuers becoming the "world's largest holders of U.S. Treasuries by 2030," Senator Bill Hagerty (R-TN), the bill's sponsor, said on Wednesday. Stablecoins had already grabbed Wall Street's attention following Circle Internet's ( NYSE: CRCL ) blockbuster market debut on June 5. Class A shares of Circle ( NYSE: CRCL ), a stablecoin issuer, have since surged a staggering +675.1% from their initial public offering price of $31, giving the company a market cap of nearly $50B. Not everyone is thrilled about Circle's ( CRCL ) debut, however. Arthur Hayes, co-founder of BitMEX & CIO at Maelstrom, wrote what he called "another missive about stablecoins" earlier this week "because of the blow out success of the Circle IPO." "To be clear, Circle is grossly overvalued, but the price will continue levitating. The listing marks the beginning not the end of this cycle’s stablecoin mania," Hayes said. "The bubble will pop after the launch of a stablecoin issuer on a public market, most likely in the U.S., that separates fools from tens of billions of capital by using a combination of financial engineering, leverage, and amazing showmanship," he added. See what Seeking Alpha analysts have to say about Circle ( CRCL ). The Bulls "I've known stablecoins like USDC and USDT for many years. As much as I'm excited to see Circle's stock rally over the past few days, I was more surprised by how profitable stablecoins can be and how Circle has evolved beyond just USDC. After reading its IPO prospectus, I realize that the company is not just a stable coin, and it may have the potential to transform into a strong global payment network," AImango Research said in " Circle IPO: The Perfect Timing ." "The GENIUS Act paves the way for stablecoin regulation, positioning Circle and USDC as key beneficiaries of this legislative clarity. Stablecoins, especially USDC, could revolutionize global payments ... Circle's dominant transfer volume and regulatory compliance give it a strong edge, but risks include heavy revenue sharing with Coinbase, competition, and yield dependency," investing group leader James Foord said in " New Legislation Creates A Trillion Dollar Opportunity In Circle ." "Circle's USDC and EURC stablecoins have strong market adoption, offering high liquidity, transparency, and regulatory compliance advantages over traditional finance. I project Circle's revenue to grow 25% annually, driven by stablecoin market expansion, margin improvement, and operating leverage as expenses scale down," Lighting Rock Research said in " Circle Internet: Anticipating Stablecoin Market Growing 8x; Initiate With 'Buy'. " The Bears "Circle's IPO has been spectacular, with shares soaring 7x in weeks, but the current valuation is extremely stretched and unsustainable. The GENIUS Act boosts stablecoin legitimacy, yet tangible business benefits for the Company are likely years away, not immediate. CRCL faces intense competition from fintech giants and established stablecoins, as well as an eroding transparency advantage if regulation passes," Josh Arnold said in " Circle: This FOMO Rally Won't Last ." "Circle's stock has soared post-IPO, but the current valuation is extremely high given its income situation. USDC growth drives revenue, but rising Coinbase-held USDC could erase Circle's net income due to costly distribution agreements. Potential dilution from outstanding options and warrants could further inflate the already stretched valuation metrics," Bill Maurer said in " Circle: Sell The IPO Surge ." More on crypto Circle Internet stock extends rally after landing Buy rating from Seaport Coinbase secures MiCA license to offer crypto services in EU Stablecoin bill will open crypto market further to traditional finance, Novogratz says What are stablecoins? Bitcoin Price Trapped Between Key EMAs As Volume And RSI Reflect Market Indecision (Technical Analysis)
