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: BlockBeats

Editor's Note: On August 19th and 20th, the stock price of stablecoin issuer Circle cumulatively rose by approximately 16.7%. During the same period, Bitcoin broke through $70,000, the U.S. bond yields retreated, 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 round of rebound was largely driven by sector-wide trends. Circle itself still has two sides to its fundamental story: while the second-quarter USDC circulation and on-chain transaction volume continue to grow, revenue growth has slowed down, with over 85% of revenue still coming from interest generated by reserve assets. As interest rates fall, whether the expansion of USDC can offset the decline in reserve yield has become a key factor affecting short-term profitability.

A longer-term variable is the Arc blockchain and Circle Payments Network (CPN). The Arc mainnet is scheduled to launch on September 16th, with institutions such as BlackRock, Visa, Mastercard, and DTCC participating in validation or related business integration. Circle hopes to expand transaction, settlement, and software service revenue through this, reducing its reliance on reserve interest.

The $259 valuation given in this article corresponds to a neutral scenario in 2030, significantly higher than the Wall Street average target price of around $101. The former already accounts for the successful commercialization of Arc and CPN, while the latter is mainly based on the next 12 months of reserve income, the interest rate environment, and recent performance. The ultimate valuation that Circle can achieve will depend on whether Arc can bring real assets, transaction activity, and sustained revenue post-launch.

Below is the translation of the original text:

Circle's stock price rose by 9.56% on August 19th to close at $78.59; the following day, it rose by 6.45% to close at $83.66, with a total two-day increase of approximately 16.7%. On August 21st, Circle continued to rise by 5.16%, closing at $87.98.

The consecutive increases indicate a significant improvement in market sentiment. However, this article believes that the market performance in the first two trading days was mainly driven by the rise in Bitcoin, the retreat of U.S. bond yields, and the strength of crypto-related stocks, with no significant underlying changes from Circle itself to explain this surge.

Two-Day Surge of Nearly 17% Driven by Cryptocurrency Market

From August 19th to 20th, Bitcoin surged above $70,000, US bond yields retreated, and cryptocurrency-related stocks saw a general increase. Circle's stock price is more sensitive to the cryptocurrency market sentiment, hence recording a larger gain.

Circle's stock price historical pullback. Despite a cumulative increase of about 16.7% from August 19th to 20th, the stock price has significantly retraced from its previous high. Source: TIKR

A meeting between the White House and cryptocurrency industry executives, an increase in USDC market share, and Circle's quarterly performance Q&A session also provided additional support to the stock price. Overall, the improvement in sector risk appetite remains the main driver of this round of gains.

A two-day trend is not enough to confirm that Circle's fundamentals have reversed. When Bitcoin rises and interest rate expectations turn dovish, the market is often willing to assign a higher valuation to Circle; however, once the cryptocurrency market cools down or US bond yields rise again, its stock price may experience significant volatility.

Compared to short-term market trends, Circle's acquisition of a portion of IBM's blockchain patent assets on July 27th holds more long-term significance. This acquisition includes over 680 patent families and nearly 1,000 granted patents, covering areas such as blockchain, banking, insurance, enterprise infrastructure, and secure cloud services.

Circle stated that following the completion of the acquisition, the company became the largest holder of blockchain patents in the US. These intellectual property rights will be used to support the development of USDC, CPN, and Arc. The patent portfolio helps strengthen Circle's technological reserves, but it may be challenging to directly translate into revenue or profit in the short term.

USDC Growth Remains Strong, But Revenue Growth is Slowing

On August 5th, Circle released its 2026 second-quarter performance. Total quarterly revenue and reserve revenue were $7.01 billion, a 7% year-over-year increase; operating business net profit was $48 million; adjusted EBITDA was $143 million, an 8% year-over-year increase.

Key USDC-related business metrics continue to show strong growth:

· End-of-quarter USDC circulation was $73.3 billion, up 19% year-over-year;

· Quarterly average circulation reached $76.5 billion;

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

The usage of USDC continues to expand, but the revenue growth remains limited. Circle's total revenue for the second quarter only slightly increased from $694 million in the first quarter, with a year-over-year growth rate that has slowed compared to before.

Circle Quarterly Revenue and Year-over-Year Growth Rate. The second-quarter total revenue, including reserve revenue, was $701 million, with a 7% year-over-year growth rate, showing a slowdown compared to before. Source: TIKR

Interest rate is a key variable in this equation. Circle primarily allocates USDC reserve assets to short-term US Treasury bonds and cash-like assets to earn interest income. The second-quarter reserve yield has decreased from 4.14% to 3.48% year-over-year, offsetting some of the revenue growth from the increased USDC circulation.

Currently, Circle's profitability is still driven by two main variables: USDC circulation determines the reserve asset size, and short-term interest rates determine the reserve asset yield. As long as interest income remains a significant portion, a rate cut will continue to suppress the income generated per unit of USDC.

Arc to Embrace 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 its revenue structure.

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

Arc is a stablecoin-native blockchain launched by Circle, with the public mainnet set to launch on September 16. Circle has stated that over 100 institutions and ecosystem projects are already participating in development, with initial validators including BlackRock, DTCC, Visa, Mastercard, ICE, Standard Chartered, and MoneyGram, among others.

BlackRock is expected to deploy the BUIDL tokenized money market fund on Arc, while DTCC plans to explore tokenizing its custody assets and integrating with Arc. These partnerships bring institutional endorsement to Arc, but there is still a distance to go before scalable adoption and stable revenue are achieved.

Circle CEO Jeremy Allaire positions Arc as a financial infrastructure serving on-chain enterprises, tokenized assets, and AI-driven payment agents. Following this plan, Circle can derive revenue from transactions, settlements, software, and network services in the future, gradually expanding its business model from stablecoin issuance to on-chain financial platforms.

In the second quarter, Circle completed a $242 million Arc token presale, and the related revenue will be gradually recognized as product milestones are achieved. In response to this development, the company has increased its 2026 other revenue guidance from $1.5 billion to $1.7 billion to $3.1 billion to $3.3 billion, while raising the Revenue Less Direct Costs (RLDC) Margin guidance from 38% to 40% to 41.7% to 43.7%.

The token presale was able to boost short-term non-reserve revenue, but its sustainability still needs to be observed. The viability of Arc's business model and its ability to attract assets, transactions, and developers post mainnet launch will ultimately determine whether a stable service revenue can be established.

CPN is also in the early stages of commercialization. The payment network had an annualized payment volume of approximately $15 billion at the end of the second quarter, which increased to $23 billion by the end of July, with commercialization expected to begin in the second half of 2026. While the payment volume has grown, the revenue conversion situation will need to be validated in subsequent financial reports.

A $259 Valuation Factors in Platform Transformation by 2030

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

In a neutral scenario, TIKR estimates that Circle's value per share will reach around $259 by the end of 2030. This result is based on assumptions such as continued growth of USDC, gradual commercialization of Arc and CPN, and is not a Wall Street 12-month consensus target price. Source: TIKR

This figure is derived 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 built on the following assumptions:

· USDC circulation maintains around 40% compound growth throughout the full period;

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

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

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

The average Wall Street target price listed in this article is around $101, approximately 21% higher than $83.66. There are significant differences in the time span and business assumptions between the two valuations. Analysts' short-term targets mainly focus on reserve revenue, interest rate changes, and recent performance; the $259 scenario anticipates Circle's successful transformation into a blockchain-based financial infrastructure platform.

Therefore, $259 is closer to a long-term optimistic scenario. If Arc evolves into a tokenized asset and a key settlement network for smart payments, Circle has the opportunity to achieve a platform company valuation. However, if network usage and business revenue fall short of expectations, interest rates, USDC scale, and crypto market sentiment will still drive its valuation.

After September 16, Commercial Revenue Is the Acid Test

Whether Arc can launch as planned on September 16 is the most explicit observation point for Circle recently. However, the mainnet launch and institutional participation are only the first steps in commercialization, and subsequent validation will rely on actual business data.

The market will need to focus on:

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

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

· Whether CPN can establish stable payment and network revenue post-commercialization;

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

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

If Circle discloses sustained growth in on-chain assets, trading activities, and commercial revenue in subsequent financial reports, its platform transformation will receive more solid evidence, and long-term valuation is also expected to further open up.

If the progress following Arc's launch remains focused on institutional lists and partnership announcements, with limited revenue contribution, Circle's stock price performance will still heavily depend on interest rates, USDC circulation, and crypto market sentiment. The recent nearly 17% two-day gain largely reflects the market reevaluating its growth expectations, while the platform transformation still awaits validation.

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