#CirclePlunges17%

Circle Plunged 17.5% in One Session, Is Now Down 40% in 30 Days, and the OUSD Launch Just Rewrote the Stablecoin Competition Narrative For Good. This Is What Went Down. Let me tell you this community the full unvarnished story on why Circle had an ass kicking week.

It’s not just one thing that hit at the same time.

It's two. First. Circle shares on Tuesday plunged 17.55% to $62.63 -- nearly its IPO price and its worst single-day decline ever.

What caused this epic fall?

Two events, both dropped on Tuesday afternoon exactly at the same time.

Event one: the launch of OUSD by the Open Standard consortium which isbacked by140 firms that are including: Stripe, Visa, Mastercard, BlackRock, BNY Mellon and Coinbase. Event two: FTSE Russell at the same time during its annual rebalance decision took Circle (CRCL) off the Russell 1000 Growth, the Russell 3000 Growth and Russell Midcap Growth indexes -- resulting in a massive wave of mechanical selling by all passive index-tracking funds who hold the security. The indexing exclusion amplified a news-driven selloff into full on cascade.

CRCL is down ~40% in the last 30 days. The OUSD attack is for real, it’s strategic, and it's different from how stablecoins attacked Circle’s market position historically. The Global Dollar Network and other prior contenders such as USDG just did not capture enough market share due to USDC’snetwork effectsand first-mover advantage.

What makes OUSD fundamentally different is this: Blackrock, Circle’s own reserve asset manager, is a partner in OUSD.

Likewise is Circle’s main custody partner BNY Mellon and largest customer Coinbase. This isn’t an independent player from scratch; this is Circle’scoreinfrastructure partners building their ownalternative using Circle’s own custody and reserve partnerships but on a very different economic framework. They will have zero mint and redemption fees.100% of Treasury interest income will be shared directly with ecosystem partners (vs. Circle keeping nearly all of it for itself) thus attacking the ~96% of their business revenue that comes from retaining the interest from its reserves instead of redistributing it.

Bears view the news as an existential threat: Circle’s “moat” has always been its network effects and trust by big banks.

However, if the firms like Visa, Mastercard and Stripe (the firms distributing USDC to their customers daily in billions of transactions) now find a greater financial incentive to useOUSD instead, growth in the circulating USDC supply will stall. Bulls point to a significant overreaction from the market with multiple savvy analysts calling the move overblown. William Blair kept its Outperform rating.

Clear Street noted the selloff is overstated. And Morgan Stanley explicitly called the notion that Coinbase would voluntarily cut its Circle deal "unlikely."

The most significant fact that bulls will point to?

OUSD will not actually launch until late 2026.

The attack is real but not yet active and the USDC market cap is still more than double the prior year and sitting at $73.7B. CircleCEO JeremyAllaire responded Tuesday in measured tones, calling stablecoinsnetworksnot coins, touting the network effects andpaymentsinfrastructure advantages that are nearly impossible to replicate quickly and pointing out past concerns about Meta and Amazon launching stablecoins backfired as these big corps just piled into USDC rather than build rival platforms. OUSD is the ultimate test of whether that premise holds. August 18, the Q2 earnings call,will bethe determining date on whether the USDC narrative continue (circulation growth> $80B and margins maintained) or if the bull case unravels(stalled growth and a renegotiation of the partnership in favor of Coinbase).

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