Bernstein Analysts Bullish on Circle, Foresee Significant Growth Driven by USDC in Next 12 Months

Analysts at Bernstein are expressing a strongly optimistic outlook on stablecoin issuer Circle, projecting that a nascent growth phase for its USD Coin (USDC) stablecoin could significantly bolster the company’s performance over the coming twelve months. In a research note released on Monday, Bernstein highlighted that USDC is exhibiting indicators of what they term "digital dollar reflation." This observation is based on a substantial increase in USDC’s supply, which has grown by approximately $2 billion within a seven-day period. This recent surge marks a notable reversal of a preceding six-month trend characterized by stagnant or declining growth for the stablecoin.

The firm has reiterated its "Outperform" rating on Circle’s stock (CRCL), setting a price target of $140. This target implies a potential upside of roughly 60% from its current market valuation. Circle shares have already demonstrated considerable momentum, having appreciated by approximately 40% over the past month.

Bernstein’s analysis suggests that the anticipated next phase of stablecoin expansion will be propelled by a confluence of several key factors. These include a resurgence of momentum within cryptocurrency markets, a clearer and more defined regulatory landscape in the United States, the burgeoning development of tokenized capital markets, and an increasing adoption of stablecoins for transactional purposes. Furthermore, the analysts pointed to emerging evidence of stablecoin utilization in payments facilitated by artificial intelligence agents, indicating a potential future driver of adoption.

While USDC currently holds the position of the second-largest dollar-backed stablecoin by market capitalization, trailing significantly behind Tether’s USDt (USDT), it has made considerable strides in terms of transaction activity. Bernstein’s data indicates that USDC’s share of adjusted stablecoin transaction volume has experienced a dramatic rise, escalating from approximately 40% in 2025 to over 60% thus far in 2026. This significant increase has allowed USDC to surpass USDt in this specific metric.

The research note was accompanied by a visual representation illustrating the growth in stablecoin transaction volume, underscoring the sector’s overall expansion.

Circle’s journey since its initial public offering (IPO) has been marked by considerable volatility. The stablecoin issuer first entered the public market in June 2025, pricing its shares at $31 and successfully raising approximately $1.1 billion in its IPO. Following an initial surge in the months after its debut, the stock experienced a decline, retreating towards its IPO price by November 2025. This downturn was attributed, in part, to a broader downturn in the cryptocurrency market, which negatively impacted publicly traded companies with exposure to the sector.

In its most recent quarterly financial report, Circle disclosed revenues of $701 million and a net income of $48 million. Both figures represent an increase compared to the same period in the previous year, indicating continued operational growth despite market fluctuations.

The broader landscape of stablecoin usage is also evolving, with initiatives like Western Union’s introduction of stablecoin remittances to the Visa network via its Stablecard. This development highlights the increasing integration of stablecoins into traditional financial infrastructure and their growing utility for cross-border transactions.

The regulatory environment for digital assets, including stablecoins, remains a critical area of focus. In Europe, the Markets in Crypto-Assets (MiCA) regulation is poised to introduce a comprehensive framework for crypto assets, though its application to decentralized finance (DeFi) protocols and specific digital asset structures is anticipated to present regulatory challenges. The ongoing evolution of regulatory frameworks globally will undoubtedly play a pivotal role in shaping the future growth and adoption of stablecoins.

Circle’s strategic positioning within this evolving ecosystem, coupled with the observed "digital dollar reflation" and increasing transaction activity for USDC, underpins Bernstein’s optimistic forecast. The analysts’ price target suggests a belief in Circle’s ability to capitalize on these trends and deliver substantial shareholder value in the near to medium term. The company’s ability to navigate regulatory complexities, maintain the stability and integrity of its USDC stablecoin, and expand its use cases across various sectors will be key determinants of its success. The growing interest in tokenized assets and the potential for AI-driven financial transactions further present opportunities for Circle to solidify its position as a leading player in the digital finance space.