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Circle stock drops by 19 percent within a day. Similar developments can also be observed in other crypto companies like Coinbase. Reason for the massive losses: The stablecoin market is under massive pressure. A significant change to the CLARITY bill and news from arch-rival Tether are causing pessimism.
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Circle Stock Drops by 19 Percent
The stock of the well-known stablecoin issuer Circle is plummeting. As of editorial deadline, the stock has fallen by 19 percent in the daily trend. It is the most drastic decline in value since its IPO in June 2025.
Just this morning, Circle stock was trading at $126.37. Since then, it has had to absorb enormous losses in value. As of editorial deadline, it is only trading at $102.72 – a decrease of a full 18.86 percent.
Despite the drastic declines, Circle’s business still appears stable. The company operates USDC, the second-largest stablecoin. Among all publicly traded companies, it remains the most important representative among stablecoin issuers.
USDC ranks sixth among all digital assets with a market capitalization of $78 billion. Dollar parity also remains intact.
What Tether Has to Do With the CRCL Crash
So why is Circle stock losing so much value despite consistent technical functionality? News from its biggest competitor seems to be to blame. Tether announced today that it has reached an agreement with one of the Big Four auditing firms.
“Tether, the largest company in the digital asset industry, announced today that it has entered into a formal agreement with one of the Big Four accounting firms to conduct its first full independent audit, which is expected to be the largest initial audit in the history of financial markets,” states a press release.
The auditing firms in question are Deloitte, Ernst & Young, KPMG, and PwC. The USDT operator has not yet announced which company signed the contract with Tether.
For Tether, the new partnership could prove to be an enormous advantage, as all major auditing firms had previously refused to cooperate with the controversial stablecoin company. The fact that they are now cooperating indicates a significant change of heart.
With a market capitalization of $184 billion, USDT is the largest stablecoin on the market. If Tether proves full reserves, the audit could positively impact the company’s damaged reputation. Investors are now assuming exactly that.
Because: Competing stablecoin operators directly benefited from Tether’s dubious reputation, even specifically using it in their advertising. Circle is one of these competitors. For years, Circle advertised that it actually held the full dollar reserve that Tether falsely promised. Although Circle’s promise was also exposed as a lie in 2022, the company was able to maintain its market position.
Through a successful audit, Tether could gain new market shares. After all, it is already a well-established market leader. The use of the alternative stablecoin USDC would then be less attractive.
CLARITY Causes CRCL to Fall
In addition to the speculative influence of competitor Tether, the CLARITY Act seems to be having a particularly negative impact on CRCL stock. The US Senate has now agreed on a version of the draft, it is said.
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CoinDesk reported yesterday on the fresh version, in which, according to insiders, an agreement was reached on a ban on stablecoin interest. The banking industry thus prevailed in the debate. For stablecoins like USDC, this eliminates a significant use case.
The bill has still not been passed; it must first receive Senate approval before US President Donald Trump could ratify it. The President wants to pass the law as quickly as possible before midterm elections can block the legislation. The parliamentary elections are scheduled for early November.
