Circle shares surge after surprise earnings beat shows strong demand for stablecoins

Circle’s growth is a sign that demand for stablecoins remains strong despite the broader crypto market’s downturn, as the company reported that the amount of USDC in circulation ticked up about 72% compared to last year. The current market cap for USDC is around $75 billion. Stablecoins, a type of cryptocurrency pegged to a fiat currency, have become increasingly popular in the past year, as a wide array of companies use them to transfer money. 

“Overall, the underlying use cases of USDC are accelerating despite crypto price headwinds,” said Robert Bamberger, a senior equity research associate at Baird. 

Circle, the second-largest global issuer of stablecoins, said in the statement that major companies like Visa and Polymarket are adopting its infrastructure. The company also said that it is partnering with Bermuda’s government to make the country the world’s first fully onchain national economy. 

As a stablecoin issuer, Circle makes most of its income by investing its users’ funds in short-term U.S. treasuries. This means that its revenue is vulnerable to any move by the Federal Reserve to lower interest rates. The company has invested in creating its own blockchain, called Arc, to diversify its revenue stream. 

Circle’s CEO, Jeremy Allaire, is a longtime believer in crypto and founded the company in 2013. Circle has become more prominent since President Donald Trump took office, as he signed the Genius Act in July to establish a regulatory framework for stablecoins. 

Circle went public in June, five months into Trump’s crypto-friendly term. The company’s stock skyrocketed 250% in its first two days, which was considered the biggest two-day pop in 45 years. As U.S. interest rates lowered to end the year and as cryptocurrencies tanked, Circle’s shares plunged in its November earnings report. The company seems to have bounced back since then. 

Nathan Schmidt, an analyst at CFRA research, says that the company should keep growing if it plays its cards right. “We believe Circle proved stablecoins can be highly profitable infrastructure plays, but sustaining this performance requires navigating rate compression, scaling technical infrastructure, and defending market share in an increasingly competitive landscape,” he said.