The Altcoin Season Index has recently signaled a decisive shift towards Bitcoin Season, with a current score of 18 indicating Bitcoin’s dominance over altcoins in the crypto market. This metric,
Zilliqa blockchain network has officially moved from version 1.0 to 2.0, a protocol upgrade that restructures the blockchain’s architecture. According to a press release shared with crypto.news, the update introduces Ethereum Virtual Machine (EVM) compatibility, a new Proof-of-Stake consensus model, and infrastructure designed to support institutional use cases. The roll out follows a six-month test phase involving 21 external validators. During this period, the proto-mainnet processed 7.5 million blocks and completed 15 client upgrades. Key features of the upgrade include modular components that allow for greater network flexibility and future scalability. The update also introduces support for tokenized assets, verifiable smart contracts, and compliance-aligned DeFi infrastructure. With EVM compatibility now in place, developers can deploy Ethereum-native applications on Zilliqa without significant changes. The platform also adds customizable shards, cross-chain communication, light client support, and updated staking mechanics. You might also like: Zilliqa faces its third major outage in four months The new staking system is designed to streamline validator onboarding and offers early incentives for users who migrate from Zilliqa 1.0. This is part of a broader shift intended to transition liquidity to the upgraded network while maintaining performance. Zilliqa’s roadmap includes future additions such as smart accounts and zero-knowledge features, with aims to support digital identity, programmable assets, and privacy-preserving compliance tools. Initial projects building on Zilliqa 2.0 span areas like tokenized assets, regulated DeFi, and fintech infrastructure. Early integrations include partnerships with LTIN and deBridge, which plans to bring native USDC to the network. Under 1.0, the network experienced periods of instability, including validator bugs and service outages. According to the team, the upgraded version offers a more modular and fault-tolerant architecture to address technical limitations and improve overall network reliability. Commenting on the upgrade, Zilliqa interim CEO Alexander Zahnd emphasized the importance of the transformation. “We’re building the blockchain institutions can trust without compromising on the speed, flexibility, or openness that brought us here in the first place. The next era of blockchain won’t be built on hype. It’ll be built on trust, transparency, and technical excellence. That’s what Zilliqa 2.0 stands for”, he said. Read more: Zilliqa CEO steps down two months after X-Bridge exploit
Kevin Svenson, a cryptocurrency trader with 83.3K YouTube subscribers, has published some interesting insights about the $OTHERS chart. $OTHERS tracks the market capitalization of all cryptocurrencies except the top 10 largest assets. The chart is now forming a pattern very similar to what it saw between March and November 2024. As Svenson’s graph illustrates, 2024 was marked by a sharp fall in the crypto market cap, followed by a brain-melting 140% rally. The analyst has pointed out that something similar, i.e., a considerable downward sell-off, has happened between December 2024 and June 2025. He now expects another bullish rally from here , with $OTHERS forming a new all-time-high. Read on for more insights on $OTHERS and how it ties up with Bitcoin and the S&P 500 index. We’ll also suggest the top altcoins to explode as the next crypto rally takes shape. $OTHERS’ Correlation with $BTC and the S&P Index Svenson said that the 140% rally coincided with the time when both Bitcoin and the S&P 500 index made fresh all-time highs. In the current context, $BTC made an all-time high on May 22, 2025, hitting $112K. Since then, it has been consolidating around the $100K mark, which seems to be a strong support zone. Currently, $BTC is only 4% away from a fresh all-time high . Similarly, the S&P 500 index has seen a rally of around 20% since mid-April and is only 1.15% away from a new all-time high. Both $BTC and the S&P index aren’t too far away from fresh highs, which Kevin expects will push the market cap of $OTHERS to $570B (a nearly 150% increase from its current market capitalization of $229B). Considering the huge upside potential, this could be the perfect time to invest in altcoins poised to benefit from the next rally. If you’re looking for high-potential picks, here are a few top cryptos worth investing in . 1. Bitcoin Hyper ($HYPER) – Top Altcoin to Explode Now, Layer-2 for Fast & Cheap $BTC Transactions Bitcoin Hyper ($HYPER) could turn out to be the most successful low-cap coin come the next Bitcoin rally. After all, it’s designed to supercharge the Bitcoin ecosystem in a way that no other meme coin has attempted before. This new cryptocurrency project aims to solve Bitcoin’s biggest problems as a blockchain, namely slow transactions, high fees, and limited programmability. It will do so by building a new Layer-2 (L2) solution that integrates the Solana Virtual Machine (SVM) and a Canonical Bridge to seamlessly support $BTC transfers between the Bitcoin L1 & Hyper’s L2. The wrapped $BTC that Hyper mints on the L2 can be used to speed up transactions, reduce gas fees, and support complex operations. In other words, it’s paving the way for Bitcoin-compatible NFTs, yield farming, and DeFi services. Bitcoin Hyper is currently in presale, with over $1.6M in early investor funding. You can buy $HYPER for just $0.012025, which puts you in a great position to benefit from its potential 12,370% surge over the next few years . 2. BTC Bull Token ($BTCBULL) – Top Altcoin to Ride Bitcoin’s Growth BTC Bull Token ($BTCBULL) is a new presale that’s quickly gaining traction thanks to its unique mission of building a thriving community of Bitcoin maximalists. The benefits of becoming a $BTCBULL owner include getting a chance to participate in Bitcoin’s price surge and winning free $BTC. Essentially, every time Bitcoin reaches a new major milestone, like $150K and $200K, for the first time, $BTCBULL holders who have stored their tokens in Best Wallet will get to partake in free $BTC airdrop events. Additionally, the developers will also burn a part of the total token supply with rising Bitcoin prices. Every time $BTC is up $50K (such as when reaching $125K, $175K, and $225K), the BTC Bull Token’s supply will go down. By creating an urgency among potential investors to buy $BTCBULL before Bitcoin hits new all-time highs, the token has masterfully planned to spike its demand and price alongside Bitcoin’s. One $BTCBULL is currently selling for just $0.00258, and the project has in total raised over $7.4M at the time of writing. Here’s how to buy $BTCBULL to support the project. 3. CZ’s Dog ($BROCCOLI) – Best Dog-Themed Meme Coin of 2025 CZ’s Dog ($BROCCOLI) is the first major meme token on BNB, carrying forward the legacy of the most successful dog meme coin of 2025. $BROCCOLI, in case you’re wondering, is based on the pet dog (called Broccoli) of Binance’s ex-CEO, Changpeng ‘CZ’ Zhao. It all started when CZ engaged in a fun banter on X, where he not only approved the idea of meme coins but also expressed his desire to launch a meme coin based on his own pet dog. The crypto community was quick to pick up the pictures he shared of Broccoli and launched several $BROCCOLI tokens. Some of the most successful ones recorded over 1,000% gains in just over a week, and while CZ’s Dog has a long way to go before it could compete against its dog-themed predecessors, the fact that it’s the only major dog meme coin on BNB has been working in its favor. The token is up 15% over the past 7 days , and if momentum holds, we can see it surge past $0.030 very soon. It’s currently trading at $0.02591. Bottom Line With both $BTC and the S&P 500 index nearing new all-time highs, expert traders like Kevin Svenson believe that the next altcoin season is just around the corner. If you want front-row seats to the upcoming altcoin frenzy, new tokens like Bitcoin Hyper ($HYPER) and BTC Bull Token ($BTCBULL) are top choices. However, bear in mind that investments in crypto are highly risky. Our article here is not financial advice, so kindly do your own research before jumping in.
You’ve heard of Grok, conversed with Alexa, and gotten smart with Siri. But have you engaged with edwin? That’s edwin, no caps – he’s an informal kinda AI, the sort that just wants to vibe while sharing the latest onchain opportunities with you and reacting to your prompts. Developed by edwin , the AI terminal – also called edwin – has just completed its public launch with the promise of transforming decentralized finance. Here’s how it works. A Wild edwin Appears Edwin is an owl who operates at the vanguard of DeFAI – the onchain vertical concerned with marrying DeFi and AI. The idea is that by making it easier for humans to interact with onchain protocols, more people will be able to get more out of DeFi. Not only in terms of value, but also enjoyment, comprehension, and all the other reasons why individuals might be drawn to DeFi. edwin’s take on this is its eponymous AI terminal that serves as a universal access point for DeFi. Not only does the chatty owl aggregate an array of services under one roof but it provides a conversational assistant capable of interacting with them on the user’s behalf. If edwin (the developer)’s thesis is vindicated, the web wallet will no longer become the primary access point for DeFi – instead that honor will go to edwin (the terminal). Naturally, there’s a web wallet built into edwin, but this has been largely abstracted to make onboarding and interactions easier. By conversing in human terms with edwin, the user can get the owl to perform specific tasks such as swapping tokens or placing stablecoins in a lending pool. Despite being built with user experience paramount, edwin still retains the core properties that are integral to DeFi such as non-custodial design. Talk to edwin Competition to become the industry’s first mass market AI assistant is intense, given the potential for the winning product to dominate the industry for years to come. The edwin team is understandably confident that its AI is capable of fulfilling this role, with CEO Liran Markin venturing: “We believe that DeFi should be as easy as chatting. The new edwin terminal is our way of making onchain finance finally accessible to the average user. It’s secure, powerful, and highly intuitive.” As befits an AI developer, the edwin team has taken a data-driven approach to designing their intelligent terminal. They cite research showing that the majority of users disengage after connecting to their first dapp, which is a clear sign of web3’s onboarding challenges that persist. If AIs such as edwin can guide new users through the tricky part of getting started and show them the opportunities that lie on the other side, it’s hoped that not only will retention rates climb, but DeFi will start working for everyone – not just the tech-savvy. With the terminal now live, the public can see for themselves if the future of DeFi is married to that of AI by having a casual chat with edwin. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Bitcoin miner revenues have fallen to their lowest levels in two months, according to analysts at on-chain and market data CryptoQuant . On June 22, daily earnings dropped to $34 million, a level not seen since April 20, 2025. The downturn is mainly being attributed to reduced transaction fees and a decline in the market price of Bitcoin. The combination of these factors is leading to an environment where miners are experiencing some of the lowest compensation rates recorded in the past year. As reported in CryptoQuant’s weekly analysis, miners are currently “the most underpaid they have been in the last year.” Bitcoin miners just saw their worst payday in a year. Daily revenue slipped to $34 million in June, the lowest since April. Falling fees and Bitcoin’s price drop are crushing margins. pic.twitter.com/TXdN06CU1F — CryptoQuant.com (@cryptoquant_com) June 26, 2025 Hashrate Falls, But Miner Selling Stays Low Despite the drop in revenue, miners have not responded with increased selling. CryptoQuant reports that Bitcoin outflows from miner wallets have steadily decreased, falling from a peak of 23,000 BTC per day in February to around 6,000 BTC today. This represents a significant reduction in selling activity, especially given the recent price volatility. Notably, the network’s hashrate has experienced a 3.5% drawdown since June 16, marking the largest decline in nearly a year. However, this drop in computational power has not translated into heightened liquidations by miners. In addition, so-called “Satoshi-era” miners have sold only 150 BTC so far in 2025, compared to nearly 10,000 BTC in 2024. Miner Reserves Grow Despite Lower Income CryptoQuant analysts also note that instead of selling, miners are increasing their reserves. Addresses holding between 100 and 1,000 BTC have grown their combined holdings from 61,000 BTC on March 31 to 65,000 BTC as of late June. This is the highest level of reserve accumulation by this group of miners since November 2024. The steady accumulation trend suggests that most miners are not facing immediate financial stress, even amid falling revenues. Their continued reserve growth indicates a long-term outlook and confidence in future price recovery, rather than capitulation under current market conditions. Overall, while Bitcoin miner revenues have declined to a two-month low, there is no evidence of widespread selling pressure in response. CryptoQuant’s findings portray a mining sector that, though underpaid by recent standards, remains resilient and strategically focused on long-term accumulation. The post Bitcoin Miner Revenues Hit Two-Month Low, Selling Activity Remains Muted: CryptoQuant appeared first on Cryptonews .
BitcoinWorld ARK Invest’s Strategic Shift: Why Cathie Wood Divested Millions in Robinhood Shares In the dynamic world of finance, where every institutional move sends ripples across markets, a recent decision by ARK Invest has captured significant attention. Led by the visionary Cathie Wood, ARK Investment Management has once again made headlines, this time with a notable divestment from one of the most talked-about retail trading platforms: Robinhood. This move isn’t just a simple transaction; it’s a strategic indicator that prompts a deeper look into the evolving landscape of digital trading and institutional investment strategies. The Sale Unpacked: What Exactly Happened with Robinhood Shares? On June 25, 2024, ARK Investment Management, under the leadership of Cathie Wood , executed a significant sale. The firm offloaded 55,949 shares of Robinhood Markets Inc. (HOOD), the popular U.S. trading platform known for both stocks and cryptocurrencies. This transaction amounted to approximately $4.63 million, as reported by Ark Invest Daily on X. While a single sale might seem minor in the grand scheme of a multi-billion dollar fund, it’s the context and the potential implications that make this particular move by ARK Invest noteworthy. Institutional investors like ARK often signal broader trends or shifts in their outlook through such actions. To put this into perspective, let’s consider the nature of Robinhood itself: Dual Platform: Robinhood offers trading for both traditional stocks and a growing number of cryptocurrencies, appealing to a wide demographic of retail investors. Retail Focus: Its user-friendly interface and commission-free trading model have made it a favorite among new and younger investors. Market Volatility: The platform has been at the epicenter of several retail trading phenomena, including meme stock surges and crypto booms, often experiencing significant volatility. Why the Divestment? Decoding Cathie Wood’s Investment Strategy When a prominent fund like ARK Invest makes a move, especially one involving a divestment, analysts and investors alike scramble to understand the underlying reasons. Cathie Wood’s investment strategy is famously centered around disruptive innovation, long-term growth, and identifying companies poised to revolutionize their industries. So, why would ARK choose to sell a significant chunk of its Robinhood shares? Several factors could be at play: Portfolio Rebalancing: ARK Invest actively manages its portfolios, often rebalancing to maintain desired asset allocations or to trim positions that have seen significant gains, allowing capital to be redeployed into other high-conviction ideas. Profit Taking: If Robinhood shares had appreciated significantly since ARK’s initial investment, the sale could simply be a strategic move to lock in profits, especially in a volatile market environment. Changing Outlook on Robinhood’s Growth Trajectory: While Robinhood has been a pioneer, the competitive landscape for brokerage firms and crypto trading platform s is intensifying. ARK might be reassessing Robinhood’s long-term growth potential against emerging competitors or regulatory headwinds. Regulatory Concerns: Robinhood has faced scrutiny from regulators regarding its business practices, payment for order flow, and crypto offerings. Potential future regulations could impact its profitability and operational model. Shifting Focus to Other Disruptors: ARK’s philosophy is to invest in companies at the forefront of innovation. Perhaps new opportunities in other sectors or technologies are presenting more compelling growth prospects, prompting a reallocation of capital. It’s important to remember that ARK’s decisions are often driven by a long-term outlook, not short-term market fluctuations. This divestment might reflect a refined view on where the most significant disruptive potential lies in the coming years. Impact on Robinhood: A Glimpse into HOOD’s Future An institutional sale, particularly from a high-profile investor like ARK Invest, can certainly influence market sentiment towards Robinhood shares . While the $4.63 million sale is a fraction of Robinhood’s market capitalization, the ‘Cathie Wood effect’ can sometimes amplify the perception of such moves. What could this mean for Robinhood? Investor Confidence: A sale by a prominent institutional investor might lead some retail and institutional investors to re-evaluate their own positions in HOOD, potentially leading to increased selling pressure in the short term. Strategic Review: For Robinhood itself, such a move from a respected fund might prompt an internal review of its strategic direction, especially concerning its growth avenues and risk management. Focus on Diversification: Robinhood has been actively working to diversify its revenue streams beyond just trading, including expanding into IRAs, credit cards, and other financial services. This sale could underscore the urgency for Robinhood to prove its long-term viability and expand its offerings. Despite the sale, Robinhood remains a significant player in the retail trading space. Its ability to attract new users and its foray into diverse financial products will be key to its future performance. Robinhood’s Role as a Crypto Trading Platform: Challenges and Opportunities A significant part of Robinhood’s appeal, especially to younger investors, has been its role as an accessible crypto trading platform . It offers a simplified gateway to cryptocurrencies like Bitcoin, Ethereum, and Dogecoin, making digital assets more approachable for the mainstream. However, this segment of its business also comes with unique challenges. Key aspects of Robinhood’s crypto operations: Aspect Description Implication Ease of Access Simple interface, low minimums, commission-free trading. Attracts new crypto investors, but may lack advanced features for seasoned traders. Limited Coin Selection Offers a curated list of popular cryptocurrencies. Reduces complexity for beginners, but limits choice for those seeking altcoins. Regulatory Scrutiny Operating in a rapidly evolving regulatory environment for digital assets. Potential for new rules to impact business model, compliance costs. Security & Custody Robinhood holds user crypto, simplifying custody but raising questions for self-custody advocates. Convenient for users, but contrasts with the decentralized ethos of crypto for some. The future success of Robinhood as a crypto platform hinges on its ability to navigate regulatory hurdles, expand its offerings responsibly, and maintain user trust in an increasingly competitive market. Institutional moves like ARK’s sale might also reflect a broader institutional caution towards the volatile and regulatory-uncertain crypto market. Broader Market Implications: What Does This Mean for Retail Investors and Investment Strategy? The sale of Robinhood shares by ARK Invest isn’t an isolated event; it’s a piece of a larger puzzle that reflects current market dynamics and evolving investment strategy among institutional players. For retail investors, such actions offer valuable insights into how large funds are positioning themselves amidst economic uncertainties, inflation concerns, and technological shifts. Here are some broader takeaways: Adaptability is Key: ARK’s willingness to adjust its portfolio, even exiting positions in companies it once championed, highlights the importance of adaptability in investment. Markets are constantly changing, and what was a strong conviction yesterday might not be today. Focus on Fundamentals: Beyond the hype, institutional investors ultimately look at a company’s underlying fundamentals, its competitive advantages, and its ability to execute its long-term vision. This sale could suggest a re-evaluation of Robinhood’s fundamental strengths in a maturing market. Diversification Remains Crucial: For retail investors, observing institutional moves reinforces the timeless principle of diversification. Relying too heavily on a single stock or sector, even one favored by a prominent investor, can expose one to undue risk. Monitor Institutional Flow, But Do Your Own Research: While it’s insightful to track what funds like ARK Invest are doing, their investment horizons and risk appetites are often different from individual investors. Always conduct your own thorough research before making investment decisions. Actionable Insights: Navigating the Volatile Market What can you, as an investor, take away from ARK Invest’s decision to sell Robinhood shares? Review Your Portfolio: Use this as an opportunity to assess your own holdings. Are your investments aligned with your long-term goals and risk tolerance? Stay Informed on Regulatory Changes: Especially if you’re invested in crypto or fintech platforms, keep an eye on evolving regulations that could impact their business models. Understand the ‘Why’: Don’t just react to headlines. Try to understand the potential reasons behind institutional moves. Is it profit-taking, a change in fundamental outlook, or a strategic reallocation? Consider Long-Term Trends: Cathie Wood’s focus is on disruptive innovation. While ARK may be adjusting its short-to-medium term positions, the underlying trends of digital finance and decentralized technologies continue to evolve. This move by ARK Invest serves as a reminder that even the most innovative companies are subject to rigorous evaluation by large funds, and their positions can shift as market conditions and competitive landscapes evolve. It’s a testament to the dynamic nature of investing, where continuous assessment and strategic adaptation are paramount. To learn more about the latest crypto market trends, explore our article on key developments shaping Bitcoin price action. This post ARK Invest’s Strategic Shift: Why Cathie Wood Divested Millions in Robinhood Shares first appeared on BitcoinWorld and is written by Editorial Team
We’re thrilled to announce that SAHARA is available for trading on Kraken! Funding and trading SAHARA trading is live as of 14:00 UTC today, Jun 26, 2025. To add an asset to your Kraken account, navigate to Funding, select the asset you’re after, and hit ‘Deposit’. Make sure to deposit your tokens into networks supported by Kraken. Deposits made using other networks will be lost. Trade on Kraken Here’s some more information about this asset: SAHARA AI Sahara AI is an open, blockchain-based platform for building, sharing and monetizing AI models, datasets and applications. It provides tools, data and secure infrastructure to support developers, resource providers and users in a collaborative AI ecosystem. Please note: Trading via Kraken App and Instant Buy will be available once the liquidity conditions are met (when a sufficient number of buyers and sellers have entered the market for their orders to be efficiently matched). Geographic restrictions may apply Get Started with Kraken Will Kraken make more assets available? Yes! But our policy is to never reveal any details until shortly before launch – including which assets we are considering. All of Kraken’s available tokens can be found here , and all future tokens will be announced on our Listings Roadmap and social media profiles . Our client engagement specialists cannot answer any questions about which assets we may be making available in the future. The post SAHARA is available for trading! appeared first on Kraken Blog .
The YieldMax MSTR Option Income Strategy ETF has grown into a $4.8 billion fund, driven by its 136% dividend yield and its connection to Strategy, the largest corporate holder of Bitcoin. MSTY’s inflows have increased each month this year, with the net amount reaching $3.9 billion. This trajectory may continue if Bitcoin ( BTC ) breaks out and hits a new all-time high, as Polymarket traders expect. Demand is also rising because Strategy’s core stock does not pay a dividend. Instead, MSTY generates its monthly distributions through a covered call strategy. MSTY ETF inflows | Source: ETF In a covered call approach, the fund invests a portion of its capital in Strategy stock and benefits as the stock rises. It then sells call options on the stock, generating premium income, which it distributes to investors. A call option is a contract that gives the investor the right, but not the obligation, to buy an asset at a specific price within a certain time period. If MSTR stock drops below the strike price, the option becomes worthless since the stock can be bought directly on the market. If the stock rises above the strike price, the call option is exercised. In this case, the fund retains the premium but sacrifices additional upside if the rally continues. If the stock remains flat, the ETF still generates a return through the monthly premium. These scenarios explain why MSTY and other covered call ETFs offer high dividend yields. MSTY has a lower total return than MSTR The 136% dividend yield is highly enticing to many income investors. For instance, a $10,000 investment would yield a gross annual dividend payment of $13,600 if the yield remains constant. However, a closer look reveals that MSTY’s total return has lagged behind MSTR’s. Data shows that MSTY has declined by 18% year to date, while MSTR stock is up 34%. The best measure of an ETF’s performance is the total return, which includes dividends. In this case, MSTR stock has risen 34.20% this year, while MSTY has gained 29%. As shown below, MSTY’s total return over the past 12 months was 107%, compared to MSTR’s 160%. MSTY vs MSTR | Source: SeekingAlpha A similar trend appears across most covered call ETFs. For example, Coinbase stock has advanced 60% in the past 12 months, while the YieldMax COIN Option Income Strategy ETF (CONY) has risen 24%. Similarly, the $40 billion JEPI ETF consistently lags behind the S&P 500 Index.
High anticipation for upcoming PCE data among crypto investors as interest cuts loom. Potential geopolitical stability could trigger crypto market gains amidst U.S.-Iran talks. Continue Reading: Crypto Enthusiasts Brace for Market Impact as Economic Data Shifts The post Crypto Enthusiasts Brace for Market Impact as Economic Data Shifts appeared first on COINTURK NEWS .
Summary Circle's post-IPO surge is unwarranted; its revenue is almost entirely dependent on short-term interest rates, making it highly vulnerable to rate declines. The GENIUS Act, while providing regulatory clarity, locks Circle into a rate-sensitive reserve model, eliminating the ability to hedge with longer-duration assets. Circle's business lacks diversification and is not differentiated enough to justify its current valuation; a significant multiple contraction is likely. Given the Fed's clear path toward lower rates, Circle's earnings and stock price face substantial downside risk—this is a strong sell at current levels. Overview Circle Internet Group ( CRCL ) surged past a $50b market cap shortly after IPO following the US Senate passage of the GENIUS Act, which provides long-awaited regulatory clarity for stablecoins. This euphoria is misplaced. Circle’s revenue is almost entirely driven by interest on reserves, making it dangerously dependent on short-term rates. Further, the structure of the GENIUS Act actually helps traditional banks more than stablecoin issuers like Circle. The company has reported several years of exceptional revenue growth, but this was due to the rapid ascent of interest rates and the current higher-for-longer environment. A declining rate environment is highly unfavorable for the business, which is already priced to perfection; therefore I believe this is a strong sell. The path of interest rates is clearly set by the Fed's dot plot, and that path is downward. As rates decline, Circle's margin profile weakens. USDC rewards become less attractive. Reserve income growth slows. The stock will be materially impacted both by deterioration of revenue quality and by the resulting multiple contraction. There is far more downside than upside baked into current prices. In this article, I will briefly describe stablecoins and how Circle makes money. I will also discuss why the GENIUS Act passing is actually a bear case hidden in plain sight for Circle. Circle's Business Circle was the second major stablecoin issuer after market leader Tether was founded in 2014. Unlike Tether, which was initially built on the Bitcoin ( BTC ) Blockchain, Circle first built on Ethereum ( ETH ). It has since expanded to several other blockchains, most notably Solana ( SOL ). Tether remains the dominant stablecoin, but Circle's advantage is in its US scale and reserve transparency. USDC owns roughly 26% of the stablecoin market and has a great distribution partnership with the leading crypto exchange Coinbase ( COIN ). Before we delve deeper, let's quickly discuss how stablecoins work. When a user buys USDC, Circle accepts payment in USD and mints one USDC per USD on-chain. When a user sells, the USDC is burned (destroyed) on-chain and USD is returned to the customer. USDC is backed 1:1 with USD, so the price remains pegged to the dollar. The monetization model should be clear from this basic overview. When Circle receives USD and mints USDC, they effectively have float. They are holding real dollars in exchange for the promise of returning those dollars when requested. In the time between deposit and withdrawal, Circle is free to do as they wish, within legal boundaries, with this cash. Considering the inherent call risk, the most sensible option is to invest the float into short-term treasuries. With the passage of the GENIUS Act, stablecoin issuers will be required to hold deposits as either: a) cash, b) demand deposit accounts (checking or savings), or c) short-term treasuries. They then generate 'reserve income' from the interest received. Circle's core business, and over 95% of its revenue for the past three years, is in this 'reserve income'. CRCL Prospectus There's an issue here though. There is little product differentiation inherent in the stablecoin market. They all do the same thing. Therefore, to attract new funds, issuers like Circle must partner with distribution intermediaries to offer rewards to investors for holding a certain stablecoin. Issuers are not allowed to offer rewards directly per the GENIUS Act, which is a major concession to the traditional banking industry. SoFi ( SOFI ) CEO Anthony Noto agrees with this sentiment: X.com He's correct. By inhibiting issuers from offering rewards themselves, the legislation effectively forces them into partnerships like that of USDC and Coinbase. Only 'affiliates' can offer rewards on stables, not the issuer itself. In essence, not only does Circle offer an undifferentiated product in a highly competitive market, but the current regulatory framework limits its ability to effectively monetize the product. And this comprises 99% of their current revenue. Ouch. I view the GENIUS Act as more bearish than bullish for stablecoins broadly. It offers regulatory clarity and legitimacy, sure, but comes with a host of limitations and increasingly burdensome reporting requirements. Washington is extending an olive branch to the traditional banking industry specifically because stablecoins are a better product than demand deposit (checking and savings) accounts and credit cards. The GENIUS Act temporarily protects big banks from disruption. Why do I believe that? Because stables have a structurally better rewards program and a better risk profile. For example, USDC holders on Coinbase earn rewards passively, just for holding cash. Compare this to credit cards, where points are only earned through spending. Next, compare holding cash in USDC versus in a savings account at a bank. Considering the lack of product differentiation, stables need to offer premium rewards and eat away at their margin. It's a race-to-the-bottom pricing game. Contrast this to banks, who lend out their float and keep a majority of the profit on their own books. Customers earn a larger share of the profit in stables versus savings accounts. Further, repayment risk is higher in retail lending than US treasuries. Overall, the Coinbase partnership is critical for Circle to access broad distribution and offer rewards to attract new funds. It comes at a steep cost though. At the time of IPO, Circle and Coinbase shared roughly half of the company's reserve income. About 50% of reserve income with only around 20% of USDC in circulation held on Coinbase. That's a great deal... for Coinbase. CRCL Prospectus The revenue share figure is due to change - it is dependent on how much USDC is held on Coinbase versus other platforms - but the fact remains that a large share of Circle's revenue is lost here. The GENIUS Act would make this partnership much more important though. Coinbase's distribution has allowed USDC to cement itself as a leading stablecoin and build a trusted brand. Still, competition is proliferating from all angles. Traditional finance companies like PayPal ( PYPL ) and Fidelity National Information Services ( FIS ) have built their own native stablecoins. Retail giants like Walmart ( WMT ) and Amazon ( AMZN ) are also reportedly looking into stablecoin technology. There are clear issues with the business model from an investment perspective. While stablecoins have enjoyed mass appeal, Circle's acute reliance on reserve income sets up plenty of downsides. During rampant crypto bull markets, demand for stables declines. Risk-on environments incentivize the traditionally risk-loving crypto investor to stay fully invested. While there is much money to be made in crypto bull markets, much of this is a zero-sum game from the perspective of net dollars sloshing around the ecosystem. Circle's long-term bull case is on net new liquidity entering the ecosystem, which will come from attracting new dollars with rewards. These rewards erode their margin and necessitate revenue sharing with intermediaries. Meanwhile, in protracted bear markets one would expect demand for stability to increase. This is true. However, a bear market increases the likelihood of rate cuts, which further erodes Circle's margin profile and rewards benefits. The counterargument to this is that the company could build a portfolio of long duration debt during elevated rate environments to secure margin, but the passage of the GENIUS Act would make this impossible. Float has to remain fully in short-term, rate sensitive vehicles like savings accounts, short-dated treasuries, and repos. When rates fall, Circle's existing treasury book will appreciate in value, which will temporarily hide the underlying issue. But this will only last for 90 days. It's trivial. For these reasons, it's critically important for Circle to diversify their business away from reserve income. To their credit, management recognizes and understands this. CEO Jeremy Allaire sees Circle as a technology platform, not just a stablecoin issuer. In the coming years, the business certainly could transform, easing its reserve income reliance and expanding into more profitable technology partnerships, but this is fraught with risk. For all the reasons I've discussed, I believe Circle is not an investable stock at current prices. There's just too much risk. Investor Takeaway Circle is a leading stablecoin issuer that took investors by surprise with its rocketing post-IPO performance. The company's business model is straightforward and simple, and it enjoys a strong distribution and scale advantage. The recent passage of the GENIUS Act added further fuel to the fire, but the fact remains that this stock is far overpriced and due for a pullback. The business model is not so differentiated to command such a high multiple, and I believe a material contraction in the stock multiple is due in the coming months. Therefore, I rate CRCL stock a strong sell.