- GENIUS ACT, which passed the US Senate this week, should bring greater utility and demand for USDC.
- CRCL stock has gained 597% off its IPO price in just two weeks.
- Coinbase has released a stablecoin platform to benefit from the new regulatory framework.
- Visa and Mastercard share prices show stablecoins could endanger the business model.
Circle Internet Group (CRCL) stock can pretty much already claim the mantle for the top stock in June. The crypto platform placed its IPO at $41 on June 5, and two weeks later, it traded as high as $216 on Wednesday. The US equity market is closed on Thursday for the Juneteenth holiday, but the 597% rally off the IPO leads traders to expect even higher share prices for the rest of the month.
Two crypto stocks stand to benefit enormously from the US Senate passing stablecoin legislation late Tuesday evening. The GENIUS bill, which is yet to be passed in the House of Representatives, makes it possible for stablecoin issuers to officially hold Treasury bonds and have a regulatory framework that would allow others to issue their own stablecoins for consumer spending purposes.
Coinbase Global (COIN), the top US crypto exchange, exploded 16.3% higher on Wednesday, while Circle Internet Group, owner of the USDC stablecoin, rallied 33.8%. Additionally, the new rules for stablecoins in the US are frightening investors in credit card issuers, with the possibility that retailers will circumvent swipe fees.
GENIUS Act roils credit cards, boon for Circle and Coinbase
The GENIUS Act passed the US Senate in a broadly bipartisan matter, 68-30, though most Democrats voted against it. It is expected to pass the House of Representatives in the next few weeks and then go to the White House for President Trump’s signature. Trump’s family business is already engaged in the cryptocurrency industry in several facets that might also benefit from the passage of the bill. The Act is also predicted to increase demand for US government debt.
“Projections show that with the passage of GENIUS, stablecoin issuers could become the world’s largest holders of US Treasuries by 2030,” said the bill’s sponsor, Senator Bill Hagerty (R-TN).
The bill allows bank subsidiaries and other regulated entities to issue stablecoins to US consumers as long as they are approved at the federal level. The Wall Street Journal reported on June 13 that both Amazon (AMZN) and Walmart (WMT) are considering issuing their own stablecoins for consumers to use at their stores. Visa (V) and Mastercard (MA) both traded more than 5% lower in the several sessions following that report as stablecoins are viewed as a means of circumventing the common 2%-3% card fees for retailers.
Coinbase then released its Coinbase Payments product, a stablecoin payments stack for commerce platforms that is already live on Shopify (SHOP) sites.
For its part, Circle’s USDC already has $61.4 billion in circulating supply, a source of cash that can be reinvested in yield-producing assets and which the market expects to grow tremendously. In the more bullish projections, some investors expect USDC to one day manage trillions of dollars in cash.
Circle Internet Group stock chart
CRCL shares have been on a tear from the start, and they may be one of the worst-priced IPOs this year. CRCL stock closed up 168% on the first day of trading off the $31 IPO price. Of the 10 sessions the stock has traded, six of them have seen double-digit gains.
While there isn’t enough data yet to predict much by way of the 4-hour chart below, there does seem to be some support between $101 and $108 and a second supportive shelf around $145.
The Fibonacci Retracement graph shows that CRCL closed above the 161.8% Fibo level of $203.48 on Wednesday. The next target for bulls should then be the 261.8% Fibo at $264.80.
CRCL 4-hour stock chart