Circle Stock Price Forecast After New CLARITY Act Update

Key Insights

• Circle stock has moved sideways in the past few weeks.
• The Senate is unlikely to have the CLARITY Act Markup this month.
• Circle has moved to the second phase of the Elliot Wave pattern.

Circle stock price dipped in recent weeks as USDC growth slowed. Investors closely tracked developments on the CLARITY Act, adding pressure to the share performance. CRCL was trading at $106.35, inside a range it has remained at since March.

CLARITY Act Markup to Delay

Circle is one of the top companies exposed to the Market Structure Bill, commonly known as the CLARITY Act. The act aims to simplify how cryptocurrencies are regulated in the United States by dividing the roles between the SEC and the CFTC.

Agreements have been reached on most issues. However, the main challenge has been on stablecoins, which are cryptocurrencies pegged to the US dollar.

Banks and credit unions have deployed their lobbyists to block firms like Coinbase, Kraken, and Robinhood from paying yield to customers.

This strategy protects traditional institutions’ dominance over interest-bearing products. Their case is that doing that will have an impact on the economy by reducing access to cash that they use to lend.

Banks, the White House, and the crypto industry have been working to find a compromise. It has failed in the past few months. A compromise would be a zero-sum game as allowing crypto companies to pay yield would mean that banks would lose.

The CLARITY Act faces delays in the Senate. Senator Thom Tillis told Tim Scott of the Banking Committee that the panel should not advance the bill this month. He added that more negotiations were needed to reach an agreement.

This means the markup may happen in May this year. Political experts warn that the continued delay in the markup could push the CLARITY Act off the calendar entirely this year. With midterm elections approaching, they argue the bill risks being sidelined if the holdup persists.

Circle Will Thrive Even If CLARITY Act Fails

Analysts argue that Circle’s business model positions it for success regardless of the CLARITY Act’s fate. They emphasize that its diversified approach shields it from regulatory uncertainty.

Circle has a relatively simple business model, where it issues stablecoins like USDC and EURC. After doing that, the company invests most of its money in short-term government bonds and earns a return.

Circle’s only challenge is its deep reliance on Coinbase. This dependency makes Circle price sensitive to shifts in that partnership. It keeps all the interest generated on its platform. Coinbase made over $1.3 billion in revenue using this model last year.

Circle has several major catalysts that may push it higher in the long term. A major catalyst is analysts’ belief that agentic shopping is the future.

Agentic shopping is a situation where AI-powered AI agents will be able to do shopping by themselves in the future. In a recent statement, Brian Armstrong noted that agentic commerce will one day pass human-based commerce.

Such a move will mean that more stablecoins will be minted. This will benefit Circle, as it will generate more interest income.

Circle Stock Price Technical Analysis

The daily chart shows that the CRCL stock price has flashed some bullish chart patterns, pointing to more gains this year. One of these patterns is the inverted head-and-shoulders. This often leads to more gains over time.

The stock is also in the second stage of the Elliot Wave pattern, which is usually a bearish one. This phase is normally followed by the third stage, which is usually the longest.

The stock has moved above the 100-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has jumped above 50. It is also about to turn the Supertrend indicator green.

Therefore, the CRCL stock will likely continue rising in the near term. It rose to the 50% Fibonacci retracement level at $175. A surge above that price will point to further gains, potentially to the all-time high of $300.

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