City starts coverage with a "Buy" rating on Circle stock | CoinDesk JAPAN

• Citi has begun coverage of Circle stock, assigning a "Buy/High Risk" rating with a target price of $243.
• Despite the significant rise in stock prices since its listing, Citi analysts argued that Circle's valuation is not overstated.
• The report from the city points out that Circle's main competitive advantage lies in its neutrality.

Circle has the opportunity to become a major player in promoting the adoption of stablecoins, as noted by Citigroup in a research report on June 30, which initiated coverage of Circle's stock.

The report argued that despite the sharp rise in stock prices since its listing, the corporate value of Circle is not overvalued. Circle, the issuer of the stablecoin, had its shares priced at $31 each in the initial public offering (IPO) and fell to $181 after reaching an all-time high of $299 last week.

City analysts have initiated coverage on Circle's stock with a "buy/high risk" rating and a target price of $243, which is 34% higher than the closing price on June 30.

Stablecoins are cryptocurrency assets that are linked to the value of other assets such as the US dollar or gold, playing an important role in the cryptocurrency market and are also used for international remittances.

According to the report, Circle is benefiting from "scarcity, a structure where the 'winner takes most', a large potential market, and momentum in regulatory development" as well as "the potential for significant operational leverage."

Analysts led by Peter Christiansen pointed out that Circle's "main competitive advantage lies in its neutrality," and further added that "Circle's defensive measures against the fragmentation risk of stablecoins, which could become the best option, are extremely important."

Considering the potential target market, the report pointed out that Circle can achieve significant excess returns due to high operational leverage and low capital intensity.

Rival Wall Street bank JP Morgan (JPMorgan) is not so optimistic and started coverage on Circle's stock on the 30th, giving it an "underweight" rating due to the valuation of the shares.