Circle shares slide 17.5% amid index exit and new stablecoin rivalry

The sell-off followed the annual reconstitution of FTSE Russell benchmarks, which stripped CRCL from the Russell 1000, 3000, and Midcap Growth indexes. This removal forces institutional funds tied to these benchmarks to adjust their holdings, putting immediate pressure on liquidity. Shares fell to an intraday low of $62.00, compounding a 40% decline over the past month.

Simultaneously, Circle faces a structural challenge from the Open Standard initiative. Unlike Circle’s model, which relies on reserve income for revenue, the newly minted Open USD offers free minting and redemption while distributing reserve earnings to participants. While Circle CEO Jeremy Allaire maintains that USDC remains the industry’s most trusted institutional-ready asset, the market is clearly recalibrating its outlook. Tether CEO Paolo Ardoino signaled the shifting landscape by publicly welcoming the new entrant, as the stablecoin sector prepares for increased competition from this coalition of over 140 businesses.