Down Nearly 70% From Its High, Is Circle Internet Group Stock a Buy for 2026? | The Motley Fool

Cryptocurrency business Circle Internet Group ( CRCL +1.01%) was among the hottest initial public offering (IPO) stocks of 2025. The IPO was priced at $31 per share. But demand from investors was so strong that the stock skyrocketed above $250 per share in short order. As they say, easy come, easy go. Circle stock has plunged 70% from its all-time high back in June. Granted, it's still more than double its IPO price of $31. But aside from its rapid gains during its first month of trading, Circle stock has trended lower, leaving investors wondering about its outlook for 2026. Image source: Getty Images. While there are concerns about Circle stock in the coming year, there may be more going on under the hood than many investors realize. Some storm clouds on the horizon I don't necessarily see a hurricane approaching off the starboard bow. But I do see some storm clouds ahead in 2026 that Circle's shareholders should be aware of. NYSE: CRCL Key Data Points The first storm cloud is the drop in federal interest rates. Circle issues the popular stablecoin USDC . To operate a stablecoin, issuers need to maintain substantial cash reserves in case stablecoin holders wish to redeem their stablecoins for cash. The company makes most of its money from these reserves. But how much it can make is dependent on interest rates. Interest rates have already dropped to their lowest levels in three years. And more cuts are potentially on the horizon. This simply means that Circle could be generating less revenue from the same deposits. Effective Federal Funds Rate data by YCharts . The other storm cloud relates to the cryptocurrency space as a whole. Adoption typically declines during a bear market . And it could be trending in that direction in 2026. As goes Bitcoin , so too usually goes the entire cryptocurrency space. On average, the price of Bitcoin drops by 60% or more every few years. Using history as a guide, it's about due for a major pullback. And it's already down 30% from its all-time high. The coming year could be a quiet one for cryptocurrency, which would likely hinder adoption of Circle's USDC stablecoin. Even though there are storm clouds, there's more to Circle's story than this. Circle's stabilizing pivots Circle is leveraging its expertise in stablecoins -- digital currencies that are pegged to a stable value, such as the U.S. dollar -- to build the Circle Payment Network (CPN). Digital transactions move money around through established financial institutions using a specific set of "pipes." Circle, however, ran its own pipes for CPN. And it's becoming a big deal. Circle's CPN only just launched in mid-2025. But the company already has more than 50 partners on board and another 500 waiting for an opportunity to join. Partners enjoy easy onboarding and cross-border capabilities with regulatory compliance. And Circle says that it's already processing volumes at an annualized rate of $3 billion. When much bigger, Circle's CPN could stabilize...

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