Shares of Circle (CRCL), the cryptocurrency company behind the USDC (USDC) stablecoin, could further fuel the recent surge, analysts at brokerage Bernstein said.
The team led by Gautam Chhugani rates the stock outperform and has a price target of $190, representing about 60% upside from current levels of $120. The stock has gained more than 100% over the past few weeks after earnings beat estimates, which may have triggered a short squeeze.
Bernstein’s paper focuses on the fact that stablecoin adoption is increasingly at odds with the broader cryptocurrency market.
Circle’s USDC supply briefly fell after a liquidity shock in the cryptocurrency market in October, but has since rebounded to just shy of a record $78 billion, despite Bitcoin And the broader cryptocurrency market remains well below its highs. The report noted that despite the cryptocurrency bear market, the total dollar-backed stablecoin market remains stable at around $270 billion.
Deal activity is also accelerating, the report noted. Adjusted stablecoin trading volume increased by more than 90% year-over-year, while transaction velocity, a measure of how often a token changes hands, also increased, indicating that stablecoins are increasingly being used outside of cryptocurrency trading.
Bernstein said payments adoption is a key driver behind this, as stablecoins are increasingly embedded within traditional card networks, enabling everyday transactions. The report noted that Visa (V), for example, currently supports more than 130 such stablecoin-linked cards in 50 countries and handles approximately $4.6 billion in annual settlement volume.
Circle is also expanding its Circle Payments Network, which allows institutions to send USDC across borders and convert it into local currencies through banking partners. The network currently includes about 55 institutions and had annual transaction volume of $5.7 billion earlier this year, the report said.
Looking ahead, Bernstein also highlighted a potential new growth theme: AI-driven “agent finance.” As autonomous software agents increasingly conduct online transactions, stablecoins may become a natural payment conduit for small payments between machines, such as API calls or automated services.
To support this vision, Circle is building a high-throughput, payments-centric blockchain called Arc designed for fast, low-cost transactions.
Read more: Why Circle and Stripe (and many other companies) are launching their own blockchains
