Circle and Coinbase Surge as Stablecoin Legislation Gains Ground

Summary of Key Developments

• The stock value of Circle has soared after the Senate’s vote on the GENIUS Act, jumping from $156 to $248, with expectations of a $2 trillion stablecoin market.
• Bitcoin treasury firms like Semler Scientific are facing challenges with minimal premiums over BTC assets, while newcomers like Fold are raising funds for Bitcoin investment.
• Tron is exploring a reverse merger for a Nasdaq listing with SRM Entertainment, in contrast, Bitdeer’s shares declined following a $330 million capital infusion, while FalconX is considering an IPO.

Stablecoin Movement Sparks Enthusiasm

The Senate’s endorsement of the GENIUS Act this week has had a positive impact on stablecoin issuers, most notably Circle. The company’s CRCL shares opened at $156.36 on the day of the legislative vote and surged, reaching nearly $249 by Friday, ultimately closing above $240. This remarkable increase marked a valuation close to eight times its original $31 IPO price, just two weeks into trading.

Analysts on Wall Street have been bullish on Circle, with Jeff Cantwell from Seaport Research Partners recently initiating coverage with a buy recommendation and a price target of $235. Remarkably, Circle’s stock exceeded this target soon after the trading began, indicating significant investor confidence.

Cantwell emphasized Circle’s ambition to establish the preeminent stablecoin network globally. He noted that his peers may not fully grasp the potential size of the stablecoin market, predicting a surge in market capitalization to $500 billion by next year and potentially reaching $2 trillion in the long run.

Coinbase, which co-created the USDC stablecoin with Circle, has also enjoyed the benefits of this legislative momentum, witnessing a 30% rise in its stock value, closing at over $308.

The Bitcoin Treasury Challenge

Michael Saylor, co-founder and chairman of Strategy, famously stated there’s no alternative to Bitcoin. However, the desire to emulate their Bitcoin treasury model may be more complex than anticipated. Recently, Semler Scientific, a healthcare provider listed on Nasdaq, faced scrutiny as its market valuation approached parity with its Bitcoin assets, indicated by an mNAV of just 1.07. This metric gauges the premium investors place on their Bitcoin reserves.

While Semler’s mNAV improved to 1.23 after announcing plans to acquire 105,000 Bitcoins by 2027, its stock price remains significantly lower than its early-year values, demonstrating ongoing investor skepticism. Meanwhile, Fold, focused on enhancing its BTC treasury, announced a $250 million stock offering, but the company’s shares have dwindled since announcing this move.

Despite challenges, Tesla and Block, Inc. have found success with substantial unrealized gains in their Bitcoin treasuries, showcasing more than threefold returns on their initial investments.

Additional Updates in the Crypto Sphere

• Tron’s Public Aspirations: Justin Sun is aiming to take Tron public through a reverse merger, although the connection to Eric Trump is unclear as Trump’s involvement has been denied despite presence on an advisory board.

• Bitdeer’s Recent Struggles: Bitcoin miner Bitdeer’s share prices have fallen after announcing an increased capital raise of $330 million, which will not go toward Bitcoin acquisition but rather cover options and expansion costs.

• FalconX Eyes IPO: In the world of crypto finance, FalconX is reportedly in preliminary discussions for an IPO, signaling growth within the sector as it explores the necessary steps for public listing.

This report has been compiled and edited for clarity and accuracy, capturing the latest movements in the cryptocurrency market and related sectors.