Circle (CRCL) Wall Street Bank Citigroup said in a research note on Monday that it has the opportunity to be a major facilitator of stable adoption.
The report said that despite the stock’s massive rally since its listing, Circle’s valuation has not been extended. Stablecoin issuer’s IPO price is $31 per share (IPO)and hit High record $299 last week, and has since slipped to $181.
Analysts at the bank started covering the stock with a buy/high risk rating and a $243 price target, about 34% from last night’s closing price.
Stablecoins are cryptocurrencies Its value is related to other assets, such as USD or gold. They play an important role in the cryptocurrency market and are also used to transfer funds internationally.
The report says the circle benefits from “scarce value, ‘winners get most’ structures, addressable opportunities, legislative momentum” and “huge operational leverage potential.”
Analysts for Peter Christiansen wrote that the company’s “key competitive power is neutrality”, adding: “Circles resist the risk of stable fragmentation – the best varieties will be crucial.”
The report added that stable issuers can get huge excess returns in the potential addressable market due to the company’s heavy operating leverage and low capital strength.
Competitor JPMorgan, Wall Street bank, is not bullish, starting to cover Circle with a lack of rating yesterday, citing the valuation of the stock.
Read more: Circle valuation is “out of our comfort zone”, initiated under weight: jpmorgan
