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

Dragonfly investor Omar tweeted that interest rate cuts are undoubtedly terrible for interest rate-sensitive companies like Circle. A 100 basis point interest rate cut will reduce Circle's total revenue by $618 million (-23%), a $303 million (-30%) drop in gross profit, and a 3.3 percentage point decline in profit margin. In terms of valuation, this requires raising a high-priced stock that trades at 42 times EV/rr gross profit to 60.4 times (about a 50% premium). To offset the impact, the USDC supply needs to increase by $28 billion (about 44% of the current $64 billion) to remain neutral. Omar said that interest rate cuts are inevitable, which is why Circle saw a large-scale stock sale of approximately $1.5 billion yesterday, and why Cir