Shares of Circle (CRCL), the crypto firm behind the stablecoin USDC (USDC), could be contributing to their recent remarkable rise, according to analysts at brokerage Bernstein.
The team, led by Gautam Chhugani, rates the stock Outperform with a price target of $190, suggesting an upside of around 60% from the current level of $120. This is after the stock rallied more than 100% in recent weeks following an earnings decline, likely triggering a short squeeze.
Bernstein’s thesis focuses on the adoption of stablecoins, which is increasingly moving away from the broader crypto market.
Circle’s USDC supply briefly fell after October’s liquidity shock to crypto markets, but has since rebounded to just shy of its record high of $78 billion, even as Bitcoin and the broader crypto markets remain well below its highs. The total market for U.S. dollar-backed stablecoins also remained stable at around $270 billion despite the crypto bear market, the report noted.
Transaction activity is also accelerating, the report notes. Adjusted stablecoin volumes increased more than 90% year-over-year, while transaction velocity – a measure of how often tokens change hands – increased, suggesting that stablecoins are increasingly being used beyond crypto trading.
Payments adoption is a key driver of this, Bernstein said, as stablecoins are increasingly integrated with traditional card networks, enabling everyday transactions. Visa (V), for example, now supports more than 130 such stablecoin-linked cards in 50 countries, processing approximately $4.6 billion in annualized settlement volume, the report notes.
Circle is also expanding its Circle Payments network, which allows institutions to send USDC overseas and convert it to local currencies through banking partners. The network now includes around 55 institutions, with annualized volumes reaching $5.7 billion earlier this year, the report said.
Looking ahead, Bernstein also highlighted a potential new growth theme: AI-based “agent finance.” As autonomous software agents conduct more and more online transactions, stablecoins could become a natural payment method for machine-to-machine micropayments, such as for API calls or automated services.
To support this vision, Circle is building a high-throughput payments-focused blockchain called Arc, designed for fast, low-cost transactions.
Read more: Why Circle and Stripe (and many others) are launching their own blockchains
