Circle, the world’s second biggest issuer of stablecoins, saw its shares dive more than 8% after its first quarterly earnings announcement as a public company. The stock dip came even though the circulation of Circle’s flagship USDC coin has more than doubled, while revenue grew 66% from last year.
Despite better than expected revenue and earnings, Circle investors appeared to be spooked by declining returns on the reserves that back its stablecoin, and provide the vast majority of the company’s income. In its Q3 earnings, Circle revealed that its reserve rate of return is now 4.2%. Meanwhile, operating expenses jumped 70% since last year and are expected to continue to rise.
