The advantages of Circle stablecoin are highlighted as analysts reaffirm a target price of $230.

Analysts from the research and brokerage firm Bernstein have stated that Circle is expected to become a major stablecoin network, reaffirming the company's stock price target of $230—an upside potential of 40% from current levels. After releasing their second-quarter financial results on Tuesday, analysts noted in a report to clients on Wednesday: "Our long-term thesis on Circle is that the most liquid, regulated stablecoins will win the position as the primary stablecoin network." Despite investor concerns about a certain trading platform possibly entering the U.S. market, as well as new stablecoin competition and interest rate pressures, analysts believe that Circle's liquidity, regulatory advantages, and payment-centric infrastructure will allow it to dominate in the long run.

Investors are concerned that the entry of a certain platform into the U.S. market under the recently signed GENIUS Act by President Donald Trump may threaten the country's USDC. However, analysts state that even if a compliant USDT is launched, it will start from scratch and lack scale, while Circle's strong partnerships with banks, payment companies, and major exchanges, along with its growing market share, make it the preferred stablecoin. Others are worried about the new stablecoin competition, as companies like JPMorgan, Bank of America, PayPal, and Robinhood have already launched or are considering launching stablecoins. However, analysts say that Circle still maintains its advantage as the most liquid payment stablecoin, benefiting from its growing market share, network effects from 24 blockchains, regulatory advantages, and strong infrastructure.

Regarding how Circle responds to the potential interest rate decline environment under the Trump administration, analysts indicate that Circle's floating income may be impacted, but the growing demand for USDC in the digital asset and DeFi markets, the increasing market share on a certain platform, and operational leverage should help offset income pressure and support margins. Analysts conclude that Circle is vying for the "grand prize" of changing payments and financial services through stablecoins, which will determine the long-term fate of its stock while balancing recent market gains through partnerships with multiple platforms, navigating the interest rate environment, and building infrastructure such as Circle Gateway, Payments Network, and Arc blockchain to ensure its future dominance and distribution advantages.

According to data from the platform, Circle is currently the second-largest stablecoin issuer, accounting for approximately $65.00 billion of the total supply of dollar-pegged stablecoins amounting to $2600.00 billion. Following its $1.2 billion IPO ( in June, Circle announced on Tuesday its plans for Arc, a Layer 1 blockchain focused on stablecoins, which is expected to launch on the public testnet this fall. This EVM-compatible chain is designed to provide enterprise-grade infrastructure for stablecoin payments, foreign exchange, and capital market applications. The company stated that Arc will use USDC as the native transaction fee, providing a stable currency engine, sub-second settlement, and opt-in privacy, while being fully integrated with Circle's platform and maintaining interoperability with other partner blockchains.

Bernstein's analysts stated that Arc has further created demand for USDC, increasing transaction volume with a focus on payments and banking, and the USDC fees have boosted its revenue line. This news was released alongside Circle's second-quarter financial performance on Tuesday. During this quarter, the circulating USDC grew by 90% year-on-year to $61.3 billion, and further increased by 6.4% to $65.2 billion by August 10. Bernstein's analysts noted: "A key positive factor is that the proportion of USDC held directly on Circle's own platform has risen to 10% of the total supply (up from 6% in the first quarter), primarily due to ecosystem partners building on Circle's infrastructure." "These balances do not incur distribution costs, allowing Circle to retain all reserve income, thus improving profit margins. The average USDC supply on one trading platform slightly increased quarter-on-quarter from about 22% to about 23%, while the supply on another trading platform rose from 9% to 13%."

Total revenue and reserve revenue increased by 53% to $658 million. Other income grew by 252% year-on-year, reflecting strong growth in subscription, service, and transaction revenue. Adjusted EBITDA increased by 52% year-on-year to $126 million. However, despite these growth indicators, the company also reported a net loss of $482 million, primarily due to $591 million in non-cash expenses related to the initial public offering, which includes $424 million in stock-based compensation and a $167 million increase in the fair value of convertible debt.

Analysts say: "As we have emphasized for a long time, the second quarter is actually irrelevant for the cryptocurrency names we cover, as Circle's IPO on June 5 has attracted strong interest from investors in the digital asset market." "Therefore, all evidence suggests that the third quarter is an important quarter to track (hint: pay attention to the ETH price trend and USDC growth in the third quarter)." According to the CRCL price page of the data platform, Circle's stock rose 1.3% to $163.21 after the news release on Tuesday, but fell 5.4% in early trading on Wednesday.

Analysts maintain long positions in various cryptocurrencies. Bernstein and its affiliates may be compensated for investment banking services provided by Circle.