Shares of Circle (CRCL) rose 4% on Wednesday after Japanese financial giant Mizuho upgraded the stock to neutral, highlighting an increase in activity on crypto prediction platform Polymarket as a new growth driver for Circle’s stablecoin USDC.
“When we launched CRCL with underperformance…We were concerned then that meager USDC distribution, falling interest rates, and fierce competition from Tether’s USDT would weigh on the stock,” wrote analyst Dan Dolev. “Since all bets on Polymarket are settled in USDC, we now view USDC on Polymarket as an imminent catalyst.”
Polymarket’s trading volumes for 2026 are off to a fast start, according to the note, with impending annualized volumes of around $50 billion, three times the amount in 2025. Mizuho estimates that the current run rate could lead to a potential upside of around 25% in USDC market cap or more.
As a result, Dolev increased his forecast for average USDC in circulation for 2026 and 2027 by approximately 7% and approximately 21%, respectively, which in turn increases his revenue estimates by approximately 6% and approximately 21% for those years.
He also highlighted the broader trends behind the rise of event-driven crypto trading. “After the 2024 US elections (which sparked the prediction market craze), these platforms diversified into betting on sports, economics and pop culture, which attracted a larger user base and volume. »
Polymarket, Dolev noted, is particularly well positioned. “Polymarket is attracting a large portion of non-native cryptocurrency users to crypto via event trading, generating additional demand for USDC outside of the usual DeFi audience.” He said the prediction platform would likely expand further over the next two years, adding billions in additional market capitalization to USDC.
Nonetheless, Dolev has not issued a bullish call, and his $77 price target suggests modest upside from the current level just above $70. “While Polymarket is certainly a potential boost for USDC,” he said, “this is somewhat offset by other headwinds, including: impending rate cuts, rising distribution costs, and intense competition from both stablecoin players like Tether. and incumbent financial institutions are launching their own stablecoins.
Circle’s 4% advance on Wednesday comes as most crypto-related names are falling alongside the continued sluggishness of bitcoin’s price, which remains stuck below the $90,000 level.
