Introduction: From August 19 to 20, the stock price of stablecoin issuer Circle rose approximately 16.7%. During the same period, Bitcoin surpassed $70,000, U.S. Treasury yields declined, and cryptocurrency-related stocks generally strengthened. News such as meetings between the White House and crypto industry executives, along with increased market share for USDC, further boosted market sentiment.
This rally has been largely driven by sector-wide momentum. Circle’s fundamentals remain mixed: USDC’s circulating supply and on-chain transaction volume continued to grow in Q2, but revenue growth has slowed, with over 85% of revenue still coming from interest earned on reserve assets. As interest rates decline, whether USDC’s expansion can offset falling reserve yields will be key to short-term profitability.
The longer-term variables are the Arc blockchain and the Circle Payments Network (CPN). The Arc public mainnet is scheduled to launch on September 16, with institutions such as BlackRock, Visa, Mastercard, and DTCC participating in validation or related business integrations. Circle aims to expand its revenue from transactions, settlements, and software services while reducing its reliance on reserve interest.
The $259 valuation provided in this article corresponds to the base case scenario for 2030 and is significantly higher than the Wall Street average target price of approximately $101. The former already factors in the successful commercialization of Arc and CPN, while the latter primarily relies on reserve income, interest rate conditions, and recent performance over the next 12 months. Which valuation Circle ultimately achieves will depend on whether Arc, upon launch, generates real assets, transaction activity, and sustained revenue.
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Circle's stock price rose 9.56% on August 19, closing at $78.59; the following day, it increased another 6.45%, closing at $83.66, for a two-day cumulative gain of approximately 16.7%. On August 21, Circle continued its upward trend, rising 5.16% to close at $87.98.
The continuous rise indicates a significant improvement in market sentiment. However, this article suggests that the price movement over the past two trading days was primarily driven by Bitcoin’s rally, declining U.S. Treasury yields, and stronger performance of crypto-related stocks, with no major fundamental changes at Circle itself sufficient to explain this surge.
From August 19 to 20, Bitcoin surged above $70,000 as U.S. Treasury yields declined, leading to broad gains in cryptocurrency-related stocks. Circle’s stock, which is highly sensitive to crypto market sentiment, posted even stronger gains.
Meetings between the White House and crypto industry executives, increased market share of USDC, and Circle’s quarterly earnings Q&A also provided additional support to the stock price. Overall, improved risk appetite across the sector remains the primary driver of this rally.
A two-day market movement is insufficient to confirm a fundamental reversal for Circle. When Bitcoin rises and interest rate expectations shift toward easing, the market often assigns Circle a higher valuation; however, if the crypto market cools down or U.S. Treasury yields rise again, its stock price could experience significant volatility.
Compared to short-term market movements, Circle’s acquisition of certain IBM blockchain patent assets on July 27 holds greater long-term significance. The 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 after the acquisition, the company became the largest holder of blockchain patents in the United States, and this intellectual property portfolio will be used to support the development of USDC, CPN, and Arc. While the patent portfolio strengthens Circle’s technological reserves, it is unlikely to directly translate into revenue or profits in the short term.
Circle announced its second-quarter 2026 results on August 5. Total quarterly revenue and reserve income amounted to $701 million, a 7% year-over-year increase; net income from continuing operations was $48 million; adjusted EBITDA was $143 million, an 8% year-over-year increase.
USDC-related business metrics continue to grow rapidly:
· At the end of the quarter, USDC circulation amounted to $73.3 billion, a 19% year-over-year increase;
· Quarterly average circulating supply 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 revenue growth remains limited. Circle's total revenue for the second quarter increased only slightly from $694 million in the first quarter, with year-over-year growth significantly slower than before.
Interest rates are a key variable. Circle primarily allocates USDC reserve assets to short-term U.S. Treasury securities and cash equivalents, generating interest income. The reserve yield in the second quarter declined to 3.48% from 4.14% in the same period last year, offsetting some of the gains from USDC's growth in circulation.
Circle's current profitability is still dominated by two variables: USDC circulation determines the size of reserve assets, and short-term interest rates determine the yield on those reserves. As long as interest income remains a significant portion, rate cuts will continue to suppress revenue per USDC.
Circle aims to expand its software and network services revenue through Arc and CPN, gradually reducing the proportion of reserve interest in its revenue structure.
Arc is a native blockchain for stablecoins launched by Circle, with the public mainnet scheduled to launch on September 16. Circle states that over 100 institutions and ecosystem projects are currently participating in its development, with initial validators including BlackRock, DTCC, Visa, Mastercard, ICE, Standard Chartered, and MoneyGram.
BlackRock plans to deploy the tokenized money market fund BUIDL on Arc, and DTCC intends to explore tokenizing its custodied securities and integrating them with Arc. These partnerships provide institutional validation for Arc, but significant distance remains before widespread adoption and stable revenue generation.
Circle CEO Jeremy Allaire positions Arc as a financial infrastructure serving on-chain businesses, tokenized assets, and AI agent payments. Under this vision, Circle will generate revenue from transactions, settlements, software, and network services, gradually expanding its business model from stablecoin issuance to an on-chain financial platform.
In the second quarter, Circle completed a $242 million pre-sale of Arc tokens, with related revenue to be recognized gradually as product milestones are achieved. Driven by this, the company raised its 2026 other revenue guidance from $150 million to $170 million to $310 million to $330 million, and increased its revenue margin after distribution costs (RLDC Margin) guidance from 38% to 40% to 41.7% to 43.7%.
Token presales can boost non-reserve revenue in the short term, but their sustainability remains to be seen. Whether Arc’s business model can succeed ultimately depends on its ability to consistently attract assets, trading activity, and developers after the mainnet launch, thereby generating stable service revenue.
CPN is also in the early stages of commercialization. The annualized payment volume of the payment network at the end of the second quarter was approximately $15 billion, rising to $23 billion by the end of July. Commercialization is expected to begin in the second half of 2026. Payment volume has already grown, but revenue conversion will need to be validated in future financial reports.
TIKR provides an estimated valuation of approximately $259 for Circle by the end of 2030 under a base-case scenario. Based on the current share price of $83.66 used in this article, this implies a potential cumulative return of about 210%, with an annualized return of approximately 30% over the next roughly 4.4 years.
This figure is derived from TIKR's long-term valuation model and is not based on Circle management guidance or Wall Street's consensus target price for the next 12 months. The model is built on the following assumptions:
· USDC circulation has maintained a compound growth rate of approximately 40% over the full cycle;
· By 2030, the global stablecoin market size is projected to expand to $1 trillion to $4 trillion;
Arc and CPN are gradually contributing significant non-reserve income;
· More USDC remains within Circle’s own infrastructure, reducing distribution costs and improving profit margins.
The Wall Street average target price listed in this article is approximately $101, about 21% higher than $83.66. The two valuations differ significantly in their time horizons and business assumptions. Analysts’ short-term targets primarily reflect reserve income, interest rate changes, and recent performance; the $259 scenario anticipates Circle’s successful transition into a on-chain financial infrastructure platform.
Therefore, $259 is closer to a long-term bullish scenario. If Arc becomes a key settlement network for tokenized assets and smart payments, Circle could achieve a platform company valuation; if network usage and commercial revenue fall short of expectations, interest rates, USDC scale, and crypto market sentiment will still dominate its valuation.
Whether Arc can launch as planned on September 16 is Circle’s most immediate milestone. However, mainnet launch and institutional participation only mark the first step in commercialization; subsequent validation will depend on actual business data.
The market next needs to focus on:
Are institutions such as BlackRock and DTCC connecting real assets and transactions to Arc?
· Will Arc's trading volume, active addresses, and fee income continue to grow?
·Will CPN generate stable payment and network revenue after commercialization?
Can the proportion of non-reserve income to total income be increased?
Can the growth in USDC volume and platform revenue offset the pressure on reserve income from interest rate cuts?
If Circle discloses sustained growth in on-chain assets, transaction activity, and business revenue in future financial reports, its platform transformation will gain stronger evidence, with potential for further upside in its long-term valuation.
If Arc’s post-launch progress remains focused on institutional lists and partnership announcements, its revenue contribution will remain limited, and Circle’s stock performance will continue to heavily depend on interest rates, USDC circulation, and crypto market sentiment. The recent two-day surge of nearly 17% reflects more of the market repricing its growth expectations, while the platform’s transformation still awaits validation.
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