Circle price plummets after removal from Russell Growth Indexes

Circle Internet Group (NYSE: CRCL) is being dropped from several major Russell Growth Indexes during the annual reconstitution of the Russell indices. The removal affects five prominent benchmarks tracked by many institutional and passive funds, and the impact on the stock is already visible in its price.

Removal from three major indexes

During the annual Russell reconstitution on 26 June, Circle will be removed from the Russell 1000 Growth Index, the Russell 3000 Growth Index and the Russell Midcap Growth Index. That is according to Simply Wall St. The rebalancing has direct implications for funds that track these benchmarks: they are more or less forced to reduce their positions in CRCL, which puts pressure on the stock’s trading liquidity.

The selling pressure surrounding the index change is already reflected in the price action. Over the past 30 days, the stock has lost 32.8%. That is a sharp decline for a company that only recently made its stock market debut.

Competition from Open USD adds further pressure on Circle

On top of the index removal, Circle faces increased competition in the stablecoin market. Today the stock fell to $62, a loss of 16.55% in 24 hours. That extra blow comes after the launch of Open USD, a new stablecoin from the Open Standard alliance backed by, among others, Visa, BlackRock and Coinbase.

The combination of selling pressure from the rebalancing and the emergence of a direct competitor makes the situation for Circle more difficult. Whether the company shows a quick recovery largely depends on how the market further assesses the stablecoin competition.