Panicking over a 20% drop? I see it as the heavens sending money our way.
Circle has plummeted terribly these past two days, crashing 20% in just one day on Tuesday, all due to that (CLARITY Act) causing trouble. Many people are asking, can we still hold this stock?
My answer is very straightforward: yes, and now might be the opportunity to get on board.
Don't be in a hurry to criticize me, let me explain why.
Many people see that the bill restricts interest distribution and think Circle is doomed. But think about it, are people really using USDC just for that little bit of interest? To put it simply, what's the biggest selling point of stablecoins? It's fast transfers, low fees, and global usability. If you keep money in a bank's savings account, you only get 0.07% interest a year, yet I haven't seen anyone take all their money out to stuff it under their pillows. Convenience is the hard truth, and interest is just the icing on the cake.
I personally think that the market's reaction is a bit excessive. It's like you bought a house, and the renovation next door was noisy for two days, so you feel like your house has depreciated, which is not the case at all.
Looking further ahead, Citigroup predicts that the stablecoin market could reach $1.9 trillion by 2030, which is still a conservative estimate. Even if Circle's market share stays at 25%, as long as the market grows, it can still thrive. Moreover, USDC is undoubtedly the leader in the regulated arena; when banks and large enterprises want to enter, it is their first choice and they won't touch those gray areas.
To take a step back, even if competition becomes fierce in the future and Circle's profit margin is cut in half, by the most conservative calculations, its valuation could still reach $75 billion by 2030. How much is it now? It's definitely worth more than half that. I've calculated this several times, and no matter how I look at it, this price now is not expensive.
To put it bluntly, I think that in investing, the biggest fear is being led by emotions. When others are panicking and you panic along, you will always end up being the one who loses out. For Circle at this position, I’m willing to make a bet.