Circle’s $181 Stock Faces 55% Drop as Trust Bank Bid Meets JPMorgan Alarm

Circle, the issuer of USDC, has applied for a national trust bank charter from the US Office of the Comptroller of the Currency (OCC).

Written by: Arslan Butt • Tuesday, July 1, 2025 • 2 min read

• Last updated: Tuesday, July 1, 2025

Quick overview

Circle has applied for a national trust bank charter to self-custody its USDC reserves and manage digital assets for institutional clients.
CEO Jeremy Allaire believes this move aligns with federal regulations and prepares Circle for upcoming changes in the stablecoin market.
JPMorgan has initiated coverage of Circle's stock with an 'underweight' rating, predicting a 55% drop due to increasing competition and reliance on reserve-based income.
Analysts express concerns over potential competitors and the lack of diversified revenue streams, contributing to market uncertainty reflected in Circle's stock price decline.

Circle, the issuer of USDC, has applied for a national trust bank charter from the US Office of the Comptroller of the Currency (OCC). The proposed entity, First National Digital Currency Bank, N.A., will allow Circle to self-custody its USDC reserves and manage digital assets for institutional clients without taking traditional deposits or making loans.

CEO Jeremy Allaire said this is a step towards aligning with federal regulatory frameworks like the GENIUS Act. This will put Circle in a better position to comply ahead of expected changes in the stablecoin space.

Circle follows firms like Fidelity and Anchorage Digital, the latter being the first to get such a charter in 2021. This trend shows growing institutional interest in bridging traditional banking with crypto-native financial infrastructure.

JPMorgan Sees 55% Drop for CRCL

Despite Circle’s progress on regulatory alignment, JPMorgan initiated coverage of CRCL with an “underweight” rating and expects the stock to drop to $80. The bank’s analysts, led by Kenneth Worthington, estimate CRCL could fall 55% from Monday’s close of $181.

The bearish view is based on:

45x multiple of 2027 EPS of $1.56
$10 premium for stablecoin interest
Growing competition in the tokenized deposit and stablecoin space

JPMorgan cites concerns over potential competitors like Fiserv, Amazon, Walmart and Mastercard which have all expressed interest in issuing their own stablecoins. They say Circle could lose market share due to low switching costs in digital financial ecosystems.

Growing Competition and Regulatory Pressures

Circle’s reliance on reserve-based income – rather than diversified revenue streams – is a red flag for analysts. CoinMetrics recently echoed JPMorgan’s view, pointing out:

Circle Stock Price Chart - Source: Tradingview — Circle Stock Price Chart – Source: Tradingview

Increasing competition from regulated stablecoin issuers
Limited income diversity outside of reserve interest
Potential CBDC threats, especially from Europe

CRCL’s price action reflects this uncertainty. After hitting an all-time high of $298 last week, the stock has fallen 39% to close at $181 on Monday. Even after surging more than 800% post-IPO, the rapid decline shows market anxiety about sustainability and competitive resilience.

Takeaways:

Circle applies for national trust bank charter to self-custody USDC.* $80
Fiserv, Amazon, Walmart, Mastercard etc.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.