Crypto markets and US equities gained ground on Thursday as geopolitical tensions in the Middle East appeared to recede. Despite the improved market sentiment, shares of major crypto firms—Circle, Bullish, and Coinbase—saw notable declines. Analysts attributed the sharp moves in Circle and Bullish to shifting outlooks for these companies, fueled by changing expectations and targeted investment recommendations.
Analyst downgrades and growth concerns weigh on Circle
Circle shares closed the day down nearly 10% after investment house Compass Point cut its rating and lowered the firm’s target price to $77. While analysts acknowledged that Circle’s USDC stablecoin has shown greater resilience during recent downturns compared to past episodes, they pointed out a shift in USDC supply toward lower-margin segments, raising concerns about future profitability.
Circle, headquartered in New York and known as one of the largest US-based stablecoin issuers, primarily operates in the stablecoin sector. According to Compass Point, Circle is currently valued at approximately 40 times its projected 2027 adjusted EBITDA. The report also highlighted that 2026 and 2027 forecasts may need to be revised downward, with particular caution surrounding the prospect of shrinking gross profit margins in the first half of 2026.
The analysis further noted that Circle’s revenue streams could be pressured as increasing amounts of USDC are held on platforms such as Sky, Binance, and Ethena. Revenue-sharing agreements on these outlets have the effect of capping Circle’s earnings. Even if total USDC circulation remains steady, greater reliance on low-yield channels could undermine the company’s overall profitability.
Bullish and Coinbase stocks decline while Bitcoin strengthens
Elsewhere, shares of fellow crypto company Bullish fell by 6.5%. Brokerage Rosenblatt shifted its recommendation on Bullish from “buy” to “neutral,” maintaining its existing price target. Analysts argued that Bullish is currently trading above industry averages, with profit expectations coming under pressure. Weaker activity in the digital asset markets, coupled with a waning contribution from non-trading revenues following Bullish’s public offering, have left the stock’s current pricing more vulnerable.
Coinbase shares also posted a notable drop on Thursday. As one of the largest US-based crypto exchanges serving both individual and institutional investors, Coinbase has faced downgraded expectations amid choppy trading volumes and reduced market participation in recent weeks. These trends have led analysts to adopt a more restrained outlook for the company.
In contrast, Bitcoin surged above the $72,000 mark on Thursday, reaching its highest point in three weeks. The rally was widely interpreted as a response to optimistic reports indicating easing tensions between the United States and Iran. Israeli Prime Minister Benjamin Netanyahu announced that he had instructed his cabinet to initiate direct negotiations with Lebanon.
These developments coincided with calls from senior US officials for Netanyahu to scale back Israeli strikes in Lebanon and return to the negotiating table. Analysts noted that this approach marks a shift from the policies pursued under Donald Trump, who had supported continued Israeli operations in Lebanon prior to the announcement of a ceasefire with Iran. Against this backdrop, regional diplomacy has had an immediate and visible impact on financial markets.
On the same day, the Nasdaq Index climbed 0.8%, while the S&P 500 rose 0.6%. The diminishing perception of geopolitical risk globally lifted sentiment not only in crypto but also across traditional financial markets. Nevertheless, the share performance of some crypto firms lagged behind the general trend, due in part to industry-specific challenges and uncertainties.
