Bitwise CIO Matt Hougan says Circle’s 22% post-CLARITY Act selloff is “excessive,” arguing USDC’s payments moat and a $1.9t stablecoin market by 2030 justify a $75b valuation target.

Bitwise Asset Management pushed back Wednesday against the market’s reaction to Circle’s recent stock plunge, with CIO Matt Hougan arguing that the stablecoin issuer’s valuation could reach $75 billion by 2030 — well above current levels — and that investors are overreacting to legislative noise. According to The Block, Hougan made the remarks in response to Circle’s (CRCL) share price cratering roughly 22% on Monday after a tougher draft of the CLARITY Act raised the prospect of banning stablecoin yield.

Hougan said the pending legislation has not altered the underlying growth logic of the stablecoin market. He pointed to Citigroup’s updated forecast, which revised its 2030 base case for total stablecoin issuance to $1.9 trillion — up from a prior estimate of $1.6 trillion — and set a bull case of $4.0 trillion, citing accelerating adoption by payment networks, corporations, and financial institutions. Hougan stressed that interest income is not the core driver of stablecoin growth, directly countering the market’s primary fear.

Equity analysts at William Blair echoed the bullish sentiment. In a recent note covered by crypto.news, Blair argued that USDC’s role as a payments “base layer” is being repriced by the market, with Circle’s compliance infrastructure, banking relationships, and cross-chain integrations forming a durable competitive moat — particularly in cross-border B2B payments.

Circle’s regulatory headwinds

The selloff that prompted Bitwise’s intervention came after the CLARITY Act’s latest draft threatened to restrict stablecoin issuers from distributing yield to holders. The concern is that such a restriction would neutralize one of the key competitive levers that Circle’s rivals use to attract liquidity, though some analysts — including Hougan — argue this could actually advantage Circle by leveling the playing field.

Circle separately froze the USDC balances of 16 business hot wallets late Monday, disrupting operations at several exchanges and platforms, further rattling investor confidence. The move revived longstanding centralization debates around USDC’s architecture, adding to the week’s negative sentiment around the stock.

The stablecoin market context

USDC currently has over $75 billion in circulation, and Circle has processed over $6 trillion in adjusted transaction volume to date. The company reported $1.68 billion in revenue for 2024, the vast majority of it generated through interest on USDC reserves invested in short-term government bonds. Citigroup’s revised $1.9 trillion base-case projection assumes stablecoin issuance will grow at roughly 20% annually through the end of the decade, driven by crypto-native ecosystems, e-commerce adoption, and the substitution of overseas dollar holdings.

William Blair, which maintains an outperform rating on Circle, noted USDC’s 30-day adjusted transaction volume recently hit nearly $6 trillion — dwarfing Tether’s $1.1 trillion over the same period — as evidence that Circle’s network effects are compounding regardless of short-term regulatory turbulence.

Bitwise’s $75 billion target implies significant upside from Circle’s pre-crash valuation and signals that institutional asset managers view the current dip as a buying opportunity rather than a structural break. The firm’s argument, in essence, is that stablecoins will grow with or without yield — and that Circle is best positioned to capture that growth.