Shares of Circle (CRCL), the crypto firm behind the USDC (USDC) stablecoin, have experienced a remarkable surge, with analysts at brokerage Bernstein suggesting the stock could rise further. The team, led by Gautam Chhugani, has rated the stock as outperform with a price target of $190, indicating a potential upside of approximately 60% from the current level of $120. This projection follows a rally where the stock surged more than 100% in recent weeks, likely spurred by an earnings beat that triggered a short squeeze.
Bernstein’s analysis highlights a key divergence in the adoption of stablecoins, which is increasingly separating from trends in the broader cryptocurrency market. After experiencing a dip in supply following an October liquidity shock, Circle’s USDC supply has rebounded, nearing its record high of $78 billion, contrasting with the performance of Bitcoin, which has been trading around $70,385.08, and the overall crypto market that remains below its previous peaks. Notably, the market for U.S. dollar-backed stablecoins has held steady at approximately $270 billion, despite the extended crypto bear market.
Transaction activity related to USDC is also on the rise. Bernstein noted that adjusted stablecoin volumes have grown by over 90% year-over-year, and transaction velocity—the frequency at which tokens exchange hands—has increased. This trend indicates that stablecoins are being utilized for purposes beyond mere crypto trading.
A significant factor driving this adoption is the integration of stablecoins with traditional payment systems. Visa has emerged as a leader in this space, currently supporting more than 130 stablecoin-linked cards across 50 countries and processing about $4.6 billion in annualized settlement volume. This development underscores the increasing acceptance of stablecoins in everyday transactions.
Circle is also expanding its Circle Payments Network, which enables institutions to send USDC across borders and convert it into local currencies through partnerships with banking institutions. The network has grown to include around 55 institutions, with annualized transaction volumes reaching $5.7 billion earlier this year.
Looking forward, Bernstein has identified a potential new growth theme: AI-driven “agentic finance.” As autonomous software agents become more prevalent in online transactions, stablecoins could serve as a natural payment method for micropayments between machines, such as for API calls or automated services. To facilitate this vision, Circle is developing a high-throughput blockchain named Arc, designed specifically for fast, low-cost transactions.
The developments surrounding Circle and USDC reflect broader trends in the evolving landscape of digital finance. As stablecoins gain traction for both institutional and consumer use, their role as a bridge between traditional finance and the burgeoning world of crypto appears increasingly significant. The potential for integration with AI technologies further enhances this outlook, positioning stablecoins as a critical component of the future financial ecosystem.
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