Shares of Circle (CRCL) dropped sharply yesterday after reports surfaced about a potential ban on earning interest from stablecoins. However, Bitwise’s Chief Investment Officer believes the market overreacted and predicts Circle’s value could double by 2030.
Circle Selloff Was ‘Overblown’ – Bitwise CIO
Shares of Circle, the company that created the USDC stablecoin, dropped 22% to $98 on Tuesday after news emerged regarding lawmakers’ ruling on a disagreement over how much interest stablecoins can earn.
Shares of CRCL fell after reports indicated a new version of the CLARITY Act—a bill being considered by the Senate Banking Committee—would likely ban platforms from offering any rewards or interest for holding stablecoins, or from structuring those holdings like traditional bank deposits.
Even after the recent price drop, some analysts believe Circle is a strong investment in the stablecoin market, calling it the most logical option. Matt Hougan, Chief Investment Officer at Bitwise, described the market’s negative reaction as an overreaction in his latest report, and stated that the proposed CLARITY Act likely won’t change the expected future performance of Circle.
So far, earning interest hasn’t been the main reason stablecoins have become popular. Most stablecoins are currently held without earning any rewards. Their growth is instead driven by their ability to quickly and reliably move money globally – for things like settling trades, providing security for loans, and offering a more stable alternative to some national currencies.
Hougan highlighted that stablecoins are incredibly convenient – a key feature for any successful form of money. He noted that traditional savings and checking accounts currently offer very low returns, averaging just 0.60% and 0.07% respectively.
He pointed out that people aren’t investing in these systems to earn interest. Instead, as the financial world moves more towards blockchain technology, stablecoins are predicted to become increasingly important, even if they don’t offer any returns.
The Case For Circle’s $75B Valuation
As a crypto investor, I was really interested to hear what Jeremy Allaire, CEO of Circle, thinks the future holds. He laid out some projections for stablecoins overall – how big the market could get – and specifically, how much of that market Circle could realistically capture in the years ahead. It’s good to get a sense of where things are headed and what the potential is for growth in this space.
According to a report from Citigroup, stablecoin assets are expected to reach $1.9 trillion by 2030 under a likely scenario, but could potentially climb to $4 trillion in a more optimistic outlook.
Bitwise’s Chief Information Officer pointed out that Circle’s USDC, the second most popular stablecoin pegged to the US dollar, currently accounts for 25% of the entire stablecoin market – second only to Tether’s USDT. However, USDC dominates the regulated portion of the stablecoin market, holding an estimated 80% or more.
If stablecoins become more popular in traditional financial systems – as banks, fintech companies, and large businesses choose regulated options – Circle could see its share of the market grow significantly from its current 25%.
Finally, he discussed how much profit Circle could make from deposits over the next four years. He explained that the company currently earns about 4% interest on the $80 billion it holds to support USDC. However, they share around 60% of that interest with partners like Coinbase, leaving them with a profit of 1.6%.
Whether it remains successful depends on factors like interest rates and competition from other similar cryptocurrencies, but Hougan forecasts that fees will decrease significantly, dropping to 0.8% by 2030.
Even considering cautious estimates for the overall stablecoin market, Bitwise’s Chief Investment Officer believes Circle could reach a $75 billion valuation by 2030, despite worries about the proposed CLARITY Act.
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2026-03-26 06:59