Circle Stock Falls Over 10% Despite Blowout 3Q Earnings Report

The market can be fickle when it comes to crypto-based companies, such as Circle. Stablecoin-issuer and payments technology company Circle Internet Group (NYSE: CRCL) released its third-quarter earnings report, showing strong revenue and earnings growth. But despite the impressive numbers, the company’s stock tumbled nearly 10% on Wednesday as investors reacted to higher expenses and concerns over future interest rate cuts. The company, which went public in June 2025, reported total revenue and reserve income of about $740 million for the third quarter, a 66% year-over-year increase that beat Wall Street estimates of $706.7 million. Earnings came in at $0.64 per share, far above the $0.20 analysts expected. Despite the strong numbers, Circle’s stock slipped to around $86, its lowest point since listing. Circle’s Q3 performance shows USDC momentum but higher costs Circle remains the world’s second-largest stablecoin issuer after Tether, and its USDC token continues to gain traction globally. By the end of September, USDC circulation reached $73.7 billion, more than double the amount from a year ago. As a contrast, Tether still leads globally with just over $180 billion USTD in circulation. Most of the Circle’s revenue stems from interest earned on the reserves backing USDC, primarily short-term U.S. Treasuries and money market funds. Here are some of the key figures from the quarter: Revenue and Reserve Income: $740 million, up 66% year-over-year Net Income: $214 million, up 202% year-over-year Adjusted EBITDA: $166 million, up 78% year-over-year USDC in Circulation: $73.7 billion, up 108% from last year Reserve Income: $711 million, up 60% year-over-year The company credited its growth to expanding adoption of USDC and new partnerships with major financial and fintech players, including Visa, Deutsche Börse Group, Fireblocks, Kraken, and Brex. CEO Jeremy Allaire said the firm’s goal is to build what he called the “economic operating system of the internet.” Meanwhile, Circle is also pushing further into blockchain development. In late October, it launched the Arc public testnet, with more than 100 companies participating from sectors including banking, capital markets, and fintech. Circle is exploring the creation of a native token for the Arc network to encourage activity and support long-term growth. However, costs are climbing fast. Circle raised its 2025 operating cost guidance to between $495 million and $510 million, citing higher compensation, new hires, and platform expansion. The firm also expects slower returns on reserves due to declining interest rates after recent Federal Reserve cuts. Circle’s forward Outlook Source: Circle  On the company’s earnings call, CEO Jeremy Allaire said he remains confident about Circle’s growth as new U.S. regulations under the GENIUS Act bring more clarity to the stablecoin market. He noted that Circle’s focus on compliance and transparency continues to give it an edge over rivals. “Overall, the stablecoin market continues to expand, and we keep gaining share,” Allaire said. “It remains a market where two issuers dominate, and Circle is building for a winner-take-most structure.” Analysts agree with his outlook. Jacob Zuller of Third Bridge said Circle is best positioned to lead U.S. market growth thanks to its regulatory strength, adding that Tether’s limited transparency makes it less competitive. Circle’s market share rose to 29% last quarter from 28%, reflecting steady momentum. Shares remain up nearly 200% from the IPO price of $31, even after falling more than 70% from their June peak.