Original Title: Circle Stock Rallied 16% in Two Days on a Crypto Surge. Here's Where the Stock Could Go in 2026

Original Author: Wiltone Asuncion

Translation: Rhythm BlockBeats

Editor's Note: From August 19 to 20, the stock price of stablecoin issuer Circle rose by approximately 16.7%. During the same period, Bitcoin broke through $70,000, US Treasury yields fell, and crypto-related stocks generally strengthened. News of meetings between the White House and crypto industry executives, as well as an increase in USDC market share, further boosted market sentiment.

This rebound largely stemmed from sector momentum. The fundamentals of Circle itself still present a mixed picture: in the second quarter, the circulation of USDC and on-chain transaction volume continued to grow, but revenue growth has slowed, with over 85% of revenue still coming from interest generated by reserve assets. As interest rates decline, whether the expansion of USDC's scale can offset the decline in reserve yield has become a key factor affecting short-term profitability.

Longer-term variables include the Arc blockchain and Circle Payments Network (CPN). The public mainnet for Arc is scheduled to launch on September 16, with institutions such as BlackRock, Visa, Mastercard, and DTCC participating in verification or related business integration. Circle hopes to leverage this to expand revenue from trading, settlement, and software services, thereby reducing reliance on reserve interest.

The valuation of $259 given in this article corresponds to a neutral scenario for 2030, which is significantly higher than Wall Street's average target price of approximately $101. The former already accounts for the successful commercialization of Arc and CPN, while the latter is primarily based on reserve income, interest rate environment, and recent performance over the next 12 months. Ultimately, the valuation that Circle can achieve depends on whether Arc can bring real assets, trading activity, and sustained income after its launch.

Below is the original text translation:

On August 19, Circle's stock price rose by 9.56%, closing at $78.59; the next day it rose again by 6.45%, closing at $83.66, with a cumulative increase of approximately 16.7% over two days. On August 21, Circle continued to rise by 5.16%, closing at $87.98.

The consecutive rise shows a significant improvement in market sentiment. However, this article believes that the price action of the first two trading days was primarily driven by the rise of Bitcoin, the decline in US Treasury yields, and the strength of crypto-related stocks, with Circle itself not presenting significant fundamental changes that could explain this rise.

Nearly 17% Rise Over Two Days, Primarily Driven by Crypto Market

From August 19 to 20, Bitcoin broke above $70,000, US Treasury yields fell, and crypto-related stocks generally rose. Circle's stock price is quite sensitive to crypto market sentiment, leading to a larger increase.

History of Circle's stock price pullbacks. Although the cumulative increase from August 19 to 20 was approximately 16.7%, the stock price is still significantly lower than its previous high. Source: TIKR

The White House meeting with crypto industry executives, the increase in USDC market share, and Circle holding a quarterly performance Q&A also provided additional support to the stock price. Overall, the improvement in sector risk appetite remains the main driving force behind this round of increases.

However, the two-day rally is insufficient to confirm that Circle's fundamentals have reversed. When Bitcoin rises, and interest rate expectations shift towards easing, the market tends to assign Circle a higher valuation; once the crypto market cools or US Treasury yields rise again, its stock price may also experience significant fluctuations.

Compared to short-term trends, Circle's acquisition of part of IBM's blockchain patent assets on July 27 has more long-term significance. This acquisition covers over 680 patent families and nearly 1,000 authorized patents, relating to areas such as blockchain, banking, insurance, corporate infrastructure, and secure cloud services.

Circle states that after the acquisition, the company becomes the largest holder of blockchain patents in the United States, and these intellectual properties will support the development of USDC, CPN, and Arc. The patent portfolio helps enhance Circle's technological reserves, but it is challenging to directly reflect as revenue or profit in the short term.

USDC Growth Remains Strong, but Revenue Starts Slowing

Circle announced its second-quarter results for 2026 on August 5. The total revenue and reserve income for the quarter were $701 million, a year-on-year increase of 7%; net profit from continuing operations was $48 million; adjusted EBITDA was $143 million, up 8% year-on-year.

Metrics related to USDC's business continue to grow rapidly:

· End-of-quarter USDC circulation reached $73.3 billion, a year-on-year increase of 19%;

· Quarterly average circulation reached $76.5 billion;

· On-chain transaction volume reached $14.8 trillion, a year-on-year increase of 151%.

The usage scale of USDC continues to expand, yet revenue growth is relatively limited. Total revenue in the second quarter increased only slightly from $694 million in the first quarter, with the year-on-year growth rate also slowing significantly from previous periods.

Circle's quarterly revenue and year-on-year growth rates. Total revenue and reserve income for the second quarter were $701 million, a year-on-year increase of 7%, with growth having slowed compared to previous periods. Source: TIKR

Interest rates are a key variable within this context. Circle primarily allocates USDC reserve assets to short-term US Treasury bonds and cash-type assets, thereby generating interest income. In the second quarter, the reserve yield dropped from 4.14% a year earlier to 3.48%, offsetting some of the gains brought by the growth in USDC circulation.

Circle's current profitability remains driven by two variables: USDC circulation determines reserve asset scale, and short-term interest rates determine reserve asset yield. As long as the share of interest income remains high, interest rate cuts will continue to suppress the revenue generated per USDC.

Arc Undertakes Circle's Platform Transformation Expectations

Circle aims to expand software and network service revenue through Arc and CPN, gradually reducing the weight of reserve interest in the revenue structure.

The Arc ecosystem involves institutions covering asset management, banking, payments, trading, and blockchain infrastructure. The public mainnet is scheduled to launch on September 16. Source: Circle

Arc is the blockchain launched by Circle that is native to stablecoins, with its public mainnet scheduled to launch on September 16. Circle reports that more than 100 institutions and ecosystem projects are already participating in its development, with the first batch of validators including institutions such as BlackRock, DTCC, Visa, Mastercard, ICE, Standard Chartered, and MoneyGram.

BlackRock is expected to deploy its tokenized money market fund BUIDL on Arc, while DTCC plans to explore the tokenization of its custody securities and integration into Arc. These collaborations bring institutional endorsement to Arc, but there is still a distance before achieving scaled adoption and stable income.

Circle CEO Jeremy Allaire positions Arc as financial infrastructure for servicing on-chain enterprises, tokenized assets, and AI-agent payments. According to this plan, Circle can obtain revenue from trading, settlement, software, and network services in the future, and its business model will gradually expand from stable coin issuance to on-chain financial platforms.

In the second quarter, Circle completed a $242 million Arc token presale, and the related income will be gradually recognized as product milestones are met. As a result, the company has revised its guidance for other revenues in 2026 from $150 million to $170 million up to $310 million to $330 million while increasing its revenue profit margin (RLDC Margin) guidance from 38% to 40% to 41.7% to 43.7%.

The token presale can boost non-reserve revenue in the short term, but its sustainability remains to be seen. Whether Arc's business model can succeed ultimately depends on whether it can continuously attract assets, transactions, and developers after the mainnet launch, thereby creating stable service revenue.

CPN is also in the early stages of commercialization. The annualized payment volume at the end of the second quarter was approximately $15 billion, rising to $23 billion by the end of July, with commercialization expected to begin in the second half of 2026. Payment volume has grown, but the revenue conversion remains to be validated by subsequent financial reports.

$259 Valuation Incorporates 2030 Platform Transformation

TIKR provides a valuation of about $259 for Circle by the end of 2030 under a neutral scenario. Based on the stock price of $83.66 used in this article, the potential cumulative return is about 210%, with an annualized return rate of approximately 30% over the next 4.4 years.

TIKR's neutral scenario estimates Circle's per-share value to be about $259 by the end of 2030. This result is based on assumptions of continued growth of USDC, gradual commercialization of Arc and CPN, and is not Wall Street's consensus target price for the next 12 months. Source: TIKR

This figure comes from TIKR's long-term valuation model and is not guidance from Circle's management or Wall Street's consensus target price for the next 12 months. The model is based on the following assumptions:

· USDC circulation maintains approximately 40% compound growth over the complete cycle;

· By 2030, the global stablecoin market expands to $1 trillion to $4 trillion;

· Arc and CPN gradually contribute significant non-reserve income;

· More USDC remains within Circle's own infrastructure, driving down distribution costs and improving margins.

The average price target listed by Wall Street is about $101, roughly 21% higher than $83.66. The time spans and business assumptions of the two valuations vary significantly. Analysts' short-term targets primarily reference reserve income, interest rate changes, and recent performance; the $259 scenario accounts in advance for Circle's successful transformation into an on-chain financial infrastructure platform.

Therefore, the $259 valuation is closer to a long-term optimistic scenario. If Arc grows to become an essential settlement network for tokenized assets and smart payments, Circle has the opportunity to achieve a platform company valuation; if network usage and commercial income do not meet expectations, interest rates, USDC scale, and crypto market sentiment will still dominate its valuation.

After September 16, Commercial Revenue Will Be the Test Standard

Whether Arc can launch as planned on September 16 is the clearest observation point for Circle in the near term. However, the mainnet launch and institutional participation can only complete the first step of commercialization; subsequent validation will still rely on actual business data.

Markets need to focus on the following:

· Whether institutions like BlackRock and DTCC will connect real assets and transactions to Arc;

· Whether Arc's transaction volume, active addresses, and fee income can continue to grow;

· Whether CPN can form stable payment and network income after commercialization;

· Whether the proportion of non-reserve income to total revenue can increase;

· Whether USDC scale growth and platform income can offset the pressure from interest rate cuts on reserve income.

If Circle discloses continuously growing on-chain assets, transaction activity, and commercial income in subsequent financial reports, its platform transformation will gain more solid evidence, and long-term valuation is also expected to open further.

If the progress after Arc's launch remains concentrated on institutional lists and partnership announcements, with limited income contribution, Circle's stock price performance will still heavily depend on interest rates, USDC circulation, and crypto market sentiment. The recent nearly 17% increase over two days reflects the market's re-evaluation of its growth expectations, and the platform transformation still awaits verification.

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