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Given the recent Genius Act signing and certain companies report second quarter revenues right away, it’s just as good as crypto stock renewals.
After the Stablecoin-focused bill became law, Compass Point analysts downgraded Circle Stock from neutral to sales.
According to a memo on Monday, the CRCL price target fell from $205 to $130.
Analysts Engel and Abdullah Dilawar had anticipated a rally leading up to the signing of the Genius Act, but predicted a drop in “Cell News.” CRCL shares were trading at about $195 at 1:30pm ET. This has been down 14% over the past five days.
Competing Stablecoins products from traditional banks and fintechs will also put pressure on CRCL’s premium ratings, they argued.
CRCL’s $53 billion market capitalization (when the memo was published) implies long-term expectations for market share and approximately 30% EBITDA margin, while the $130 price target assumes a 15% long-term market share and a 20% EBITDA margin.
The circle is set to report second quarter revenue during the August 12 webcast.
Going ahead, Jeffries purchased Galaxy Digital coverage on Tuesday, achieving its purchase rating and price target of $35. He missed this in court at a storm trial in Rome.
Glxy’s stock price was just above $30 at 1:30 PM ET. This week it’s up about 12%.
Being a “comprehensive provider of institutions seeking digital asset exposure” gives Galaxy an edge over more specialized peers such as prime broker Falconx, liquidity provider Cumberland, market maker Wintermute, and Bitcoin-centric company Nydig.
The Genius Act can open up new Stablecoin-related business opportunities (such as custody and issuing partnerships), they added. The Clarity Act can contribute to “incremental” revenue OPPs when an agency player enters a segment.
Beyond that, about two-thirds of Galaxy’s corporate value comes from the data center business, according to Jefferies. The company purchased Argo Blockchain’s Helios Mining facility in 2022 and hosts CoreWeave AI and HPC operations.
During Galaxy’s August 5th revenue call, we hear what Mike Novogratz has to say.
Before Circle and Galaxy reports revenue for next month, Coinbase will share its second quarter results on July 31st.
In a note on July 16, Compass Point Analyst raised Coinbase price target from $195 to $330 (coin stock traded at $395 this afternoon). However, rather than choosing to “buy,” I repeated its neutral rating.
Crypto Exchange headwinds include US trading activities, CME futures and decentralized exchanges moving towards US ETFs. Monthly data from competitors such as Robinhood and Exodus confirms weak Q2 trends for that purpose.
Compass Point analysts estimate that Coinbase’s trading revenue fell 45% in the quarter.
“We are scaring of the possibility of short-circuit coins in the crypto bull market and reducing the Fed rate from Powell or his successor,” writes Engel and Dilawar. “However, if rate reductions and clear laws are postponed beyond 3Q25, this could put pressure on the coin’s valuation as the basics get worse.”
Before you enjoy the weekend (after reading the rest of this newsletter, of course), I’ll mention another crypto-linked stock that turned my head with the latest employment.