On March 24, Circle's stock plummeted by 20% due to concerns surrounding the provisions of the Clarity Act in the U.S. Analysts at Bitwise defended the company, predicting that the market capitalization of USDC could reach $75 billion.
A lot of people want to invest in the stablecoin boom, and $CRCL is one of the most obvious choices: a pure-play stablecoin company, publicly traded.
— Bitwise (@Bitwise) March 25, 2026
But how do you value it? @Matt_Hougan says you ask three questions.
— How big will stablecoins get?
— What will Circle's market…
“The market's reaction is exaggerated. There’s nothing in the news about the Clarity Act that changes the outlook for the stablecoin sector. Interest income has not been a primary driver for stablecoins. The vast majority of these assets are currently held in ways that do not generate interest for holders,” said Bitwise's investment director, Matt Hougan.
The latest draft of the bill proposed banning interest payments to users solely for holding stablecoins, a point that industry representatives disagreed with. Insider reports indicate that this wording made it into the final version of the Clarity Act.
While USDC does not directly yield profits for holders, users receive incentives and rewards through platforms like Coinbase. As competition in the stablecoin segment increases, any restrictions could impact Circle's long-term growth prospects, according to community members.
“One popular opinion is that Circle's market share will decline as major players—Bank of America, Stripe, Wells Fargo—begin issuing their own stablecoins. I’m not so sure. Historically, innovators have successfully defended their early market share,” noted Hougan.
Coinbase Under Pressure
Similar sentiments were echoed by 10x Research founder Marcus Tilen. He stated that the market is overlooking the long-term implications. In its current form, the bill impacts Coinbase's distribution model more than Circle's infrastructure role.
The exchange derives most of its financial benefits from USDC. Coinbase captures nearly all interest income from stored balances, while revenue from off-platform balances is split roughly 50/50.
According to Tilen's estimates, Circle pays Coinbase over $900 million annually—about half of its profits.
This model has made the stablecoin business highly profitable for Coinbase. If regulators ban payments similar to interest income on balances, part of this advantage will be lost.
“The situation increasingly favors Circle on a relative basis. Federal regulation will shift value towards issuers who operate within the rules, have scale, and a reliable balance sheet,” stated an expert.
Challenges for Tether
The pressure on Circle's stock was also exacerbated by news that its main competitor, Tether, has engaged a Big Four auditor (Deloitte, EY, PwC, or KPMG) to conduct its first full audit of USDT.
Tether Signs Big Four Firm to Complete First Full Audit, Setting a New Quality Standard for the Digital Asset Economy
— Tether (@tether) March 24, 2026
Read more: https://t.co/rtsB7l4nJL
Previously, the company only published attestations, which did not meet the requirements of the Genius Act and had been criticized multiple times.
However, analysts at William Blair believe that conducting an audit will not become a mandatory competitive advantage for Tether. The issuer may still face challenges entering the U.S. market.
“A significant barrier to compliance with the Genius Act will be the illegal use of USDT, which is likely to attract the attention of U.S. regulators,” they noted.
The Tether stablecoin is not officially regulated in the United States, although American users can still hold it. At the end of January, the company launched USAT—a locally focused stablecoin.
In March, the Financial Stability Board under the G20 noted the increasing risks associated with fiat-pegged assets.