The excitement over stablecoins has led Circle Internet (CRCL·Circle) and Coinbase (COIN) to rank as the top two foreign stocks in net buying by domestic investors for June. It is the first time since September of last year that the top two monthly net buying stocks were not major U.S. tech stocks, known as the 'Magnificent 7 (M7·Apple, NVIDIA, Microsoft, Tesla, Amazon, Alphabet, Meta).'

According to the Korea Securities Depository on the 27th, domestic investors have net purchased Circle shares worth $505.965 million (about 690 billion won) as of the previous day (based on settlement day) in this month. Excluding exchange-traded funds (ETFs), Coinbase has the second-highest net purchase at $10.701 million (about 145 billion won).

Illustration=ChatGPT DALL-E

It is the first time since September of last year that both the top two net purchases of foreign stocks by domestic investors were not M7. At that time, Trump Media & Technology (DJT) and Occidental Petroleum (OXY) were the top two foreign stocks net purchased by domestic investors. Stocks related to former President Donald Trump, a Republican presidential candidate, saw trading surge due to the issuance of Trump meme coins and benefits from fossil fuel policies.

Usually, the top net purchases of foreign stocks by domestic investors were dominated by U.S. tech stocks, including M7. From November of last year to April of this year, Tesla (TSLA) maintained the top spot. Last month, UnitedHealthcare (UNH) ranked first, but the second position went to one of the M7 companies, Apple (AAPL).

However, with recent market interest shifting toward stablecoins, Circle and Coinbase have emerged as the 'favorite' stocks among 'foreign small investors' (individual investors in U.S. stocks). Stablecoins are designed to maintain a stable price reflecting the value of fiat currency, such as '1 dollar=1 coin.'

Graphic=Son Min-kyun

Circle is the issuer of the U.S. dollar stablecoin 'USDC.' USDC is the second largest stablecoin after Tether (USDT). Circle was listed on the 5th (local time) at an offering price of $31, and its stock price has been surging following the passage of the related stablecoin law (Genius Act) in the U.S. Senate. On the 23rd, it rose to over 298.99 dollars, which is nine times the offering price, and the closing price on the 26th was 213.62 dollars, about seven times the offering price.

Coinbase, a virtual asset exchange, has recently entered into a revenue-sharing agreement with Circle, and is considered a beneficiary of stablecoins. Coinbase's stock price has also increased by more than 50% this month alone.

Given that Circle and Coinbase's market capitalizations are nearing 70 trillion won and 130 trillion won, respectively, the influence of foreign small investors is not significant. The equity ownership by domestic investors is around 1% and 0.5%, respectively. However, there has been observation of trading volume concentrating in pre-market hours, which is in the evening in Korean time, pushing the stock prices up.

It remains uncertain whether these stocks will continue to hold top positions as the most purchased foreign stocks by domestic investors. Previously, stocks such as Starbucks and Tempus AI, which are not part of M7, had ranked first and second in monthly net purchases but were pushed out of the attention of domestic investors as stock price volatility decreased.

In the case of Circle, the average target stock price provided by three global securities firms was $213.3, which is similar to the current stock price. Given the short-term increase in the stock price, domestic investors are likely to seek profit realization.

For Coinbase, the average target stock price from 33 securities firms is $283.3, which is about 24.5% lower than the current stock price, though recent target prices are being adjusted upward. Recently, global investment bank Oppenheimer raised its target price from $293 to $395, while Bernstein increased it from $310 to $510.

※ This article has been translated by AI. Share your feedback here.