Shares of Circle Internet Group Inc. (CRCL) came under pressure this week despite higher-than-expected revenue. Circle issues USDC, a US-dollar backed Stablecoin, writes Amber Kanwar, host of the In the Money with Amber Kanwar podcast.
The issue this quarter is the interest they are earning on their US dollar reserves is declining, while their distribution costs (fees they pay to exchanges or banks to incentivize use) are rising. The Stablecoin issuer went public in June at $31 and while the stock is still trading well above those levels, it is below the August level of $130.
Meanwhile, stocks have been rising on the end of the US government shutdown and a rally in tech. The market did wobble after the weekly release of ADP payrolls showed a significant slowdown in hiring, though. Normally the market completely ignores this release, but without official government data it is all we have.
The lack of data could also dent the prospects of another rate cut by the Federal Reserve in December, according to the latest reporting from the Wall Street Journal. “Officials are fractured over which poses the greater threat — persistent inflation or a sluggish labor market — and even a resumption of official economic data may not bridge the differences,” wrote Nick Timiraos of the WSJ.
