Actions of Internet Circle group (NYSE: CRCL) climbed this week, finishing 83.2% compared to last week’s fence. The mass racing came like the S&P 500 (Snpindex: ^ GSPC) And Nasdaq Composite (Nasdaqindex: ^ xicic) were relatively flat.
The company, which IPO at the beginning of the month, is the only transmitter of USDCone of the most popular stable on the market. Investors have soared this week after the US Senate adopted the Act on Engineering, a historic bill that would create a federal regulatory framework for Stablecoins.
The bill allows banks, fintech companies and retailers to legally issue and use stablecoins, while establishing consumer protections and regulatory monitoring for their use. The bill must now identify the House of Representatives. The members of the Chamber will have to reconcile the bill with their own version, which contains key differences, in particular in agencies would take the lead in market regulations. If the bill succeeds in making its way to the office of President Trump and is signed, it will mark a moment in the watershed for the adoption of stablescoin and the cryptocurrency market as a whole.
Senator Kirsten Gillibrand, co-sponsor of the bill, said that the bill aims to “allow American companies and consumers to take advantage of the next generation of financial innovation” and to “protect consumers, activate responsible innovation and protect the domination of the US dollar”.
Since its IPO earlier this month, Circle Stock has increased by almost 200%. Although I think the excitement is justified, investors should pay attention to the evaluation. With a market capitalization of nearly $ 60 billion and sales last year of $ 1.7 billion, there is already a lot of growth.
Although I think that Circle could very well do and that $ 1.7 billion should grow significantly if the law on engineering becomes the law, there are two factors that deserve stock, taking into account its valuation.
First, the company’s income is directly linked to interest rates, which are currently high. While the federal reserve reduces rates, which should be done later this year, the results of the company will be affected. Second, a significant part – around 50% – Circle’s income is paid to Jamming As part of the relationship of the two companies. This percentage can change depending on the amount of USDC coinbase which keeps its exchange. This means that Circle’s fate is directly linked to the decisions made in another company.
