Dragonfly investor: Interest rate cuts would be disastrous for Circle, with revenue and profits expected to plummet

PANews reported on August 14th that Dragonfly investor Omar tweeted that interest rate cuts are undoubtedly dire for rate-sensitive companies like Circle. A 100 basis point rate cut would reduce Circle's total revenue by $618 million (-23%), gross profit by $303 million (-30%), and profit margin by 3.3 percentage points. This would require a valuation increase from a high-priced stock trading at 42x EV/RR to 60.4x (approximately a 50% premium). To offset the impact, USDC supply would need to increase by $28 billion (approximately 44% of the current $64 billion) to achieve a neutral outlook. Omar stated that an interest rate cut is inevitable, explaining Circle's massive $1.5 billion stock sale yesterday and its eagerness to launch products (CPN and Circle Chain) to monetize transaction flow.