The analyst predicted a collapse in Circle's revenues.

# The analyst predicted a collapse in Circle's revenues following the Fed's rate cut.

The issuer of the USDC stablecoin, Circle, will face serious pressure if the Fed lowers the key rate following the September meeting. This conclusion was shared by the investor Dragonfly under the pseudonym Omar.

This will play out in the months ahead, but interest rate cuts are horrendous for rate sensitive names like Circle — A 100bps cut slashes run rate gross revenue by $618m (-23%), gross profit $303m (-30%), and margins 3.3%
— Valuation wise, takes an expensive stock trading at 42x… pic.twitter.com/FspLbdUD8N

— Omar (@TheOneandOmsy) August 13, 2025

The main source of the company's income is the interest from US Treasury bonds, which back its stablecoin. A decrease in the Federal Reserve's key rate will reduce the yield on these assets, directly cutting profits.

Almost 93% of market participants are awaiting a softening of the regulator's policy.

Source: CME FedWatch According to an expert, if the rate drops by 100 basis points, it will reduce Circle's annual income by $618 million and gross profit by $303 million.

The reduction will also increase the company's stock price by 50% with lower profits. To compensate for the losses, the issuer will need to increase the issuance of USDC by $28 billion — 44% of the current volume of $64 billion.

An analyst under the nickname MartyParty suggested that Circle announced the launch of its own blockchain Arc specifically in preparation for a potential decline in profits. This way, the issuer will be able to "monetize transactions." The company’s stablecoin operates on the networks of other crypto projects such as Ethereum and TRON, and the transaction fees are received by them, not Circle.

The company also announced the launch of the Circle Payments Network (CPN) payment system.

On August 15, it became known that the issuer will release 10 million shares on the secondary market at a price of $130 per security — four times more than during the IPO in June, reports CoinDesk.

Recall that in July, Circle submitted an application for a trust bank license in the USA.