On Thursday, cryptocurrency prices and U.S. stocks experienced a significant rally as concerns surrounding the Middle East began to ease. However, not all sectors shared in the optimism, with several notable declines in the cryptocurrency market, particularly for companies like Circle (CRCL), Bullish (BLSH), and Coinbase (COIN).
Circle saw a dramatic drop of 9.9%, trading at $85.10 after Compass Point downgraded the stock from Neutral to Sell, reducing its price target by $2 to $77. The brokerage highlighted that while USDC has shown resilience compared to previous downturns, the recent supply growth is shifting toward lower-margin markets. It warned that Circle’s current valuation—at 40 times what it describes as optimistic 2027 adjusted EBITDA estimates—may prove unsustainable. Further complicating matters, there are indications that consensus forecasts for 2026 and 2027 may need to be revised downwards due to expected reductions in gross margins. The firm pointed out that more USDC is now held on various platforms such as Sky, Binance, and Ethena, where revenue-sharing agreements could adversely affect Circle’s profitability. In a bear market, even a stablecoin’s supply can remain intact, but if that supply is concentrated in lower-yield environments, the potential profit pool could diminish.
Similarly, Bullish faced pressures of its own, declining 6.5% to $36.12 after Rosenblatt downgraded the stock to Neutral from Buy while maintaining a $39 price target. The firm noted that Bullish is currently trading at 28 times its consensus adjusted EBITDA, representing a premium compared to peers, including Coinbase and Robinhood (HOOD). Rosenblatt also indicated that revenue projections are at risk as crypto activity wanes and the boost from IPO-related non-trading earnings diminishes.
Meanwhile, Bitcoin showed bullish momentum, rising above the $72,000 mark to trade at its highest point in more than three weeks. This upward movement was likely influenced by recent developments regarding the U.S.-Iran conflict. Israeli Prime Minister Benjamin Netanyahu announced instructions to his cabinet to initiate direct negotiations with Lebanon. This signals a shift in diplomatic approach, with senior U.S. officials, including envoy Steve Witkoff, urging Netanyahu to curtail military actions in Lebanon and pivot towards dialogue. Such moves reflect a departure from the previous administration’s more aggressive stance, suggesting a potential pathway to easing tensions in the region.
Amid these market dynamics, the Nasdaq composite gained 0.8%, while the S&P 500 rose by 0.6%, buoyed by the diminishing concerns regarding geopolitical instability.
