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Bernstein: Circle's stock price correction may have gone too far; the market is misreading the impact of stablecoin regulations
Svmuu News: In response to the sharp decline in Circle’s stock price, investment bank Bernstein stated that the market’s interpretation of the U.S. stablecoin regulatory draft is misguided, and the current sell-off may have exceeded the risks implied by fundamentals.Previously, Circle’s stock price fell by approximately 20% in a single day, briefly approaching the $100 mark, primarily due to provisions in the draft “Clarity Act” that would limit returns on stablecoin reserves. However, Bernstein pointed out that the rule targets distributors, not issuers.Analysts emphasized that a distinction must be made between stablecoin issuers and distribution platforms: Circle generates yield by investing approximately $80 billion in USDC reserves into short-term U.S. Treasuries, with related revenue expected to reach about $2.64 billion in 2025; however, it does not directly pay interest to token holders. (The Block)
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