Circle Stock Drops 5% After Morgan Stanley Downgrade Amid Crypto Market Volatility

Circle Internet's stock (CRCL) fell over 5% in pre-market trade on Monday after Morgan Stanley downgraded the company to 'Underweight' from 'Equal Weight'. The analyst, James Faucette, warned that Circle's USDC revenue model faces pressure due to a potential slowdown in the growth of USD Coin in circulation.

The downgrade adds to the pressure faced by CRCL stock amid the uncertainty around the Digital Asset Market Clarity Act (CLARITY). The legislation did not appear on the Senate's agenda for this week, with the chamber scheduled to enter recess on August 10.

Bitcoin's price also fell 0.8% in the last 24 hours to below $63,000, while other cryptocurrencies such as Ethereum, Ripple's XRP, and Solana (SOL) fell more than 1% in the same period.