Shares of Circle and Coinbase came under pressure Tuesday after CoinDesk reported that Coinbase Global is evaluating whether to join a new stablecoin platform backed by Stripe, Visa, and Mastercard. The move has placed renewed attention on Coinbase's existing revenue-sharing agreement with Circle, which is set for renewal in August.
Market Slump and Retail Sentiment Worsen
Circle shares fell as much as 4% shortly after the market opened, while Coinbase dropped 1.4% in the same session. Bitcoin traded near $66,800, down 2.8% over 24 hours, after briefly slipping toward $65,000 and triggering a $1.8 billion liquidation wave across crypto markets.
Data from Stocktwits showed retail sentiment for both Circle and Coinbase had turned bearish over the past day. Message volume for Circle rose 40% in 24 hours, while both stocks saw more than 150% growth in message volume over the past month.
Stripe-Backed Platform Challenges USDC's Turf
Circle's business is heavily concentrated on USDC reserves. The company generated $2.64 billion in 2025 revenue from income on assets backing USDC, according to its filings. A Stripe-Visa-Mastercard-backed infrastructure could operate outside USDC and divert payment activity away from Circle's network.
Visa and Mastercard shares also dropped over 2% in Tuesday's early trading. Stocktwits sentiment split: Visa trended bearish while Mastercard improved to extremely bullish from bullish.
Coinbase-Circle Deal Under Renewal Scrutiny
Investors are focused on Coinbase's current arrangement with Circle. Under the 2023 agreement, Coinbase keeps all interest income from USDC held on its exchange and splits revenue equally with Circle on USDC in circulation elsewhere.
Coinbase CEO Brian Armstrong addressed the agreement during the Q1 earnings call last month, noting the contracts were in place and that Coinbase expected to continue under the same terms. However, the CoinDesk report raised questions about whether Coinbase could gain more bargaining power by joining an alternative stablecoin platform before the August renewal deadline.
Combined with Bitcoin weakness and bearish retail sentiment, the stablecoin competition adds fresh pressure on both Crypto firms as the August deadline approaches.