According to The Block, Circle’s stock fell by approximately 20% on Tuesday amid market concerns over provisions in the draft of the U.S. Clarity Act that limit stablecoin yields. However, Bernstein analysts believe the market has misinterpreted the legislation, emphasizing that the bill primarily targets distributors rather than issuers—Circle earns reserve yields through investments in short-term U.S. Treasury securities and does not directly pay yields to token holders, thus remaining unaffected by the specific provision. Bernstein maintains an Outperform rating on both Circle and Coinbase, with target prices of $190 and $440, respectively.
Bernstein: Market Misinterprets the Clarity Act; Circle’s 20% Stock Decline Is an Overreaction
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Summary
Circle's stock fell 20% on Tuesday as the crypto market reacted to a draft provision in the U.S. Clarity Act that caps stablecoin yields. Bernstein analysts say the cryptocurrency market has misunderstood the bill, which targets distributors, not issuers. Circle generates yields through U.S. Treasury investments and does not pay direct returns to token holders. Bernstein maintains an outperform rating for Circle and Coinbase, with price targets of $190 and $440.
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