Circle Stock Down Over 70% From High as Analysts Debate Investment Thesis

Circle Internet Group has switched on the public mainnet for Arc, a Layer 1 blockchain built for financial markets, real time payments, and AI driven economic activity, with USDC integrated at the protocol level. The rollout arrives with a validator group drawn from large financial institutions, support for USDC, EURC, and tokenized funds, and more than 100 applications and ecosystem partners already connected to Arc's infrastructure. Circle Internet Group last closed at $91.78, while the most followed narrative framework pegs fair value closer to $103.55, implying the stock is 11% undervalued. That fair value estimate uses a discount rate of 8.56% and assumes that by 2029 Circle Internet Group could be earning $723.7 million on revenue of $5.3b, with the stock trading on a P/E of 56.9x on those earnings, against a current analyst price target of $104.28. Estimates behind that single fair value number diverge widely, with 2029 earnings estimates spanning from $356.6 million to $874.2 million and price targets running from $37.00 to $243.00. The stock trades on 51.6x earnings compared with 29.5x for the wider US Software group and a fair ratio of 51.7x.

The Fed raised its policy rate by 0.25 points to 3.75–4.00%. The vote was unanimous at 12–0, and 16 of the 18 participants expect at least one more rate hike before the end of the year. Major U.S. banks have raised their prime rate from 6.75% to 7.00%, and the extra cost is already flowing through to credit cards and variable-rate business loans. Homeowners who locked in 30-year fixed mortgages at rates in the 2–3% range during the pandemic's low-rate era, however, will not see their payments rise right away, while those buying now face the 30-year fixed average of 6.76% that Freddie Mac reported as of September 10, 2026, widening the divide between generations. In San Francisco, two economies coexist: AI companies and those with stock-based compensation on one side, and early-stage startups funding themselves through loans along with restaurants, retailers and freelancers on the other. Higher rates are a headwind for Bitcoin on the liquidity front, but for stablecoin issuers that hold short-term U.S. Treasuries as reserve assets, they are a driver of expanding interest income.

Circle Internet Group launched Arc, a purpose-built open Layer 1 blockchain for financial markets, as its public mainnet. The network integrates Circle's USDC and EURC stablecoins for payments, FX, trading, lending, and asset issuance with dollar-denominated gas fees, and is backed by an institutional validator set that includes BlackRock, DTCC, Mastercard, and Visa. More than 100 ecosystem partners, including banks, payment networks, asset managers, custodians, DeFi protocols, and wallets, are participating at launch. Arc pulls several existing Circle products into one stack, from USDC and EURC to Circle Payments Network and StableFX, so the group now also operates the transaction layer where those tokens move, trade and settle. Circle Internet Group has a US$21.6b market cap and a software industry classification.