Circle reported second-quarter results before the open on August 5. The shares opened as much as 7% higher, gave all of it back, and closed at $63.28, essentially unchanged, on 20.1 million shares against a 13.2 million average. The market read the release twice and liked it less the second time.

Three things got better.

1. The Coinbase distribution agreement renews on its existing terms. July’s review ranked a renegotiation as a medium-probability, high-severity risk, on the reasoning that Circle’s largest distributor had helped found the rival Open USD token. Coinbase’s own finance chief confirmed the renewal on that company’s call, so this is corroborated rather than asserted.

2. The margin Circle keeps on reserve income held at 41.2% and was guided higher, to 41.7-43.7% for the year. That is the opposite of the compression the bear case predicted.

3. The OCC granted a full national trust bank charter, the first to a stablecoin issuer, and the Arc blockchain has a September 16 mainnet date with BlackRock, DTCC, Visa, Mastercard and ICE among its founding validators.

Three things got worse.

1. USDC in circulation finished at $73.3 billion against $77.0 billion three months earlier, a 4.8% sequential contraction and the first since listing. The year-on-year comparison still reads +19%, which flatters it.

2. On-chain transaction volume rose 151% year on year and fell 31% quarter on quarter. Adjusted EBITDA fell to $143 million from $151 million.

3. The reserve return rate dropped another 66 basis points to roughly 3.5%. Roughly 95% of revenue is the product of float and yield, and both moved the wrong way.

What that adds up to. The doubling of other-revenue guidance to $310-330 million was the most-quoted positive, but it explicitly includes recognised proceeds from the ARC Token presale, a financing event that will not repeat. Underlying non-reserve revenue is still under 5% of the total and fell sequentially. At $63.28 the stock trades on roughly 52 to 60 times forward earnings that themselves lean on that token revenue, against a probability-weighted fair value near $70.

So the verdict is unchanged and the reasoning is not. In July the worry was that a competitor would compress Circle’s pricing. Pricing held. What shrank was demand, which is the harder of the two problems, because a contract can be renegotiated and a customer base cannot. The full breakdown sits in the complete Circle Internet Group (CRCL) report on our Reports page.