Circle Stock (CIRC)

• Stablecoins are a relatively newer product type and there is considerable regulation risk for companies operating in this space. In recent months, stablecoins have come under significant pressure from US regulators. Regulators are “concerned about their ability to threaten financial stability, by increasing the interconnectedness between the regulated financial system and the crypto markets.”
• Asset volatility is a major challenge for Circle. In their S-4, Circle highlighted that “digital assets, such as Bitcoin, have historically experienced high levels of volatility far in excess of that experienced in fiat currencies. A number of factors contribute to changes in digital asset prices and volatility, including, but not limited to, changes in the supply and demand for a particular digital asset, market sentiment, macroeconomic factors, utility of a particular digital asset, and idiosyncratic events such as exchange outages or commentary on social media.” This volatility makes it difficult for Circle to get a stable view of their financials. 
• Cybersecurity risk is another concern that they face. Circle’s use of third-party systems does leave them vulnerable to security attacks on those providers. These service providers receive and hold funds for the benefit of customers, but cyberattacks on those providers can open Circle up to risks.