Crypto Stock Outlooks Shift Following GENIUS Act and Ahead of Q2 Earnings
By Ben Strack | July 25, 2025
As the cryptocurrency industry continues to evolve amid new regulations and upcoming earnings reports, investor sentiment toward certain crypto-related stocks has seen notable fluctuations. The recent enactment of the GENIUS Act, alongside impending second-quarter financial disclosures, has prompted market analysts to reassess their outlooks on key players within the space.
Circle: Downgraded Following Stablecoin Legislation
Circle (CRCL), a significant stablecoin issuer, experienced a pronounced shift in analyst sentiment shortly after the GENIUS Act was signed into law. Compass Point analysts Ed Engel and Abdullah Dilawar downgraded Circle’s stock rating from neutral to sell, accompanied by a reduction in their price target from $205 to $130. In a detailed note released Monday, the analysts acknowledged the rally in Circle’s stock price leading up to the legislation’s passage but predicted a subsequent “sell-the-news” reaction that materialized with shares dropping approximately 14% over the past five days. Trading near $195 per share as of 1:30 p.m. ET, Circle’s valuation has faced pressure largely due to expected competition from stablecoin products emerging from traditional banks and fintech firms.
Compass Point’s revised valuation model assumes a long-term market share of 15% for Circle, down from prior assumptions of roughly 25%, and a contraction in EBITDA margins to approximately 20% from an earlier expectation of 30%. The stock’s $53 billion market capitalization reflected these heightened hopes before the downgrade.
Circle is scheduled to report its second-quarter earnings during an August 12 webcast, an event analysts and investors will be watching closely for further guidance.
Galaxy Digital: Jefferies Initiates Coverage with Buy Rating
In contrast to the cautious tone on Circle, Jefferies took a bullish stance on Galaxy Digital (GLXY) by initiating coverage with a buy rating and setting a $35 price target on Tuesday. Galaxy’s shares hovered just above $30 at 1:30 p.m. ET, marking a roughly 12% gain during the week.
Jefferies highlights Galaxy Digital’s positioning as a “comprehensive provider for institutions seeking digital asset exposure,” which provides an advantage over more specialized competitors like prime brokerage FalconX, liquidity firm Cumberland, market maker Wintermute, and bitcoin-focused NYDIG.
Notably, Jefferies expects that the GENIUS Act could unlock fresh stablecoin-related revenue opportunities for Galaxy, including custody and issuance partnerships. Additional potential stems from the pending CLARITY Act, anticipated to further bolster institutional adoption and associated business growth.
The firm also notes that about two-thirds of Galaxy’s enterprise value is derived from its data center operations. After acquiring Argo Blockchain’s Helios mining facility in 2022, Galaxy has expanded this infrastructure by hosting AI and high-performance computing clients such as CoreWeave.
Investors will be keen to hear insights from Galaxy’s CEO Mike Novogratz during the company’s earnings call on August 5. —
Coinbase: Mixed Signals Ahead of Q2 Results
Coinbase (COIN), the largest U.S.-based crypto exchange, is set to release its second-quarter results on July 31. Compass Point analysts recently raised their Coinbase price target from $195 to $330, even as they maintained a neutral rating rather than upgrading to buy.
The firm attributes headwinds to a shift in U.S. retail trading activity away from centralized exchanges like Coinbase toward exchange-traded funds (ETFs), CME futures, and decentralized platforms. Supporting this trend, monthly usage data from competitors such as Robinhood and Exodus points to weak trading volumes in Q2. Compass Point estimates that Coinbase’s transaction revenue declined roughly 45% quarter-over-quarter, underscoring the challenging environment.
While analysts remain cautious about shorting Coinbase during what could be a broader crypto bull market—especially if the Federal Reserve pursues interest rate cuts—they warn that delayed regulatory clarity or postponed rate cuts beyond the third quarter of 2025 could further weigh on Coinbase’s valuation.
SharpLink Gaming: Leadership Boost Sparks Share Volatility
Elsewhere in the sector, Nasdaq-listed SharpLink Gaming has garnered attention following the appointment of Joseph Chalom, formerly BlackRock’s head of digital asset strategy, as its new co-CEO. SharpLink, known for its alignment with the Ethereum ecosystem and its sizable cryptocurrency treasury (360,807 ETH as of July 20), witnessed substantial share price swings — gaining about 110% over the past month before retreating approximately 30% in the last week.
Given the volatility and strategic changes among public crypto companies, industry watchers emphasize the importance of closely monitoring equity movements alongside regulatory and market developments.
Looking Ahead
With the combined impact of the GENIUS Act, the anticipated CLARITY Act, and crucial Q2 earnings reports from major industry players like Circle, Galaxy Digital, and Coinbase, the crypto stocks landscape remains dynamic. Investors and analysts alike will be paying particular attention to how these companies navigate regulatory shifts, evolving competition, and changing market sentiment in the months ahead.
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Ben Strack is a financial journalist covering developments in digital assets and blockchain technology.