Summary Circle remains a Strong Buy as it leads the stablecoin revolution and outperformed the benchmark with a 38% stock surge. USDC adoption is accelerating, with a 28% YoY increase in circulation and a 263% rise in on-chain transaction volume to $21.5 trillion. Recent partnerships, such as with Nium and Kyriba, expand CRCL's use cases and support the long-term bull thesis. I see stablecoins in early innings, with potential for a $2 trillion market if regulatory support materializes, positioning CRCL for further growth. Yes, I think that, so far, the stablecoin revolution has a clear winner. Sure enough, Circle ( CRCL ) is a volatile hold, but my bullish thesis has been playing out as I anticipated. The stock surged 38% since my last article and significantly outperformed the benchmark. CRCL: Stock Surged 38% Since My Last Article (Seeking Alpha) Now, my initial bull thesis argued that Circle was at the forefront of a multi-year digital asset and global payment revolution. I strongly believe that the financial system we view today is gradually changing. And Circle could become a key beneficiary of the developments. Quite frankly, nothing has changed since my previous article. If anything, the recent quarterly reports strengthen my bull case. The performance suggests that CRCL has a significant market share and truly leads the stablecoin revolution. So, I maintained my rating as a Strong Buy. I wouldn't be surprised by Circle outperforming the benchmark further. Here's why. USDC Adoption Continues Now, just a few weeks ago, the company reported earnings. While on the surface it could appear to be a shaky quarter , I actually loved it. Why? What I think matters the most is USDC adoption. And a 28% growth on a year-over-year basis of USDC in circulation clearly shows the demand remains intact. Quite frankly, what's more fascinating in my opinion is that USDC on-chain transaction volume skyrocketed 263% over the past 12 months. Now, it reached $21.5 trillion in volume in Q1. And that's surely not nothing. Personally, I believe that these metrics remain the most important long-term. If the stablecoin adoption continues successfully, Circle may be able to secure a significant market share. And that may lay success for the years to come. That's something I will be looking forward to seeing in the future quarterly reports. CRCL: Q1 2026 (Circle Internet Group Investor Relations) Now, given the USDC integrations and efforts tied to Circle's payment network, I am in the camp that the adoption may continue further. Just a few days ago Circle announced collaboration with Nium to enable USDC settlement for cross-border payments. Or roughly a month ago the company partnered with Kyriba to embed USDC into Kyriba's platform in order to provide more efficient treasury operations. That's just a few deals that happened recently. But as you can see in the slide below, Circle shared that there are many more use cases for its products. If anything, I think this strongly supports Circle's long-term bull case in my opinion. And I also think that the stablecoins are still in the first innings. So, I am excited to see what happens next. CRCL: Continued Use Case Expansion (Circle Internet Group Investor Relations) Now, what I also love about the company's recent performance is that euro adoption remains strong, too. If anything, I find a 210% growth on a year-over-year basis of EURC in circulation a justification of strong international demand. CRCL: Digital Euro Adoption (Circle Internet Group Investor Relations) There's also one more thing I'd love to touch upon. The USDC circulation is becoming more diversified platform-wise, as well. Now, that's important. I think that different platforms may work as distribution channels that could successfully accelerate adoption. And with such a significant partner as Coinbase ( COIN ) in place, that's another long-term tailwind for the company in my opinion. Quite frankly, it's a well-known platform that operates in multiple countries globally and has more than a half trillion dollars in assets on its platform . So, I believe this comes in handy for digital asset adoption. And given the USDC in circulation on Coinbase that increased from 25% to 27% on a year-over-year basis tells me that partnership is working. CRCL: USDC Circulation Growth (Circle Internet Group Investor Relations) Lastly, what I think could move the needle for the stock in the years to come is that if margins can remain elevated. For instance, I love seeing RLDC margins increase on a year-over-year basis. That's a bump from 39.9% to 41.4% . Simply put, if margins continue to increase that could result in bottom-line acceleration. And the market may be willing to reprice CRCL at even a higher premium. CRCL: Resilient RLDC Margin (Circle Internet Group Investor Relations) To be fair, I liked this quarterly report a lot. And the best part of it was that the management reassured shareholders with solid guidance for the remainder of the year. I am in the camp that the company could achieve these targets. Now, a 40% CAGR for USDC in circulation growth seems significant. And if that were to happen, I wouldn't be shocked by a rerate higher, quite frankly. But that's, of course, not guaranteed. Anything can happen. CRCL: Guidance (Circle Internet Group Investor Relations) The Stablecoin Revolution Could Reach $4 Trillion By 2030 That's correct. Citigroup shared its research on stablecoin growth projection. Back in 2025 the stablecoin total market issuance was estimated at approximately $280 billion . Now, Citigroup vocals that it could reach $4 trillion over the next four years if the bull case materializes. That's about 13x over the next four years. Sure enough, that's not a walk in the park. I believe these are truly significant market expectations. And I am in the camp this could materialize. As I have pointed out before, Circle highlighted USDC onchain volume skyrocketed 263% . And that simply tells to me that there's significant demand for the stablecoins themselves. Now, some may argue that $4 trillion feels like a stretch. But Citigroup's base case of $1.9 trillion argues for more than 6x over the next four years. So, if the bull case materializes for the stablecoin revolution, sure enough, CRCL could become a significant beneficiary. On top of this, such legislations as the Genius Act helps a lot. It not only establishes a legal framework. But also accelerates digital asset adoption. And that's the long-term tailwind in my opinion. I Argue There's More Room For Multiple Expansion Now, Circle Internet Group isn't a cheap name. That's for sure. The fintech trades at roughly 90x forward P/E . And that's about a 3.4x overvaluation versus the sector median at 26x. Although it may sound like the upside is limited for CRCL, I argue that may not be the case here. CRCL: Forward P/E (YCharts) Now, a few things I'd love to highlight before we dig in deeper. The chart above suggests that historically CRCL has been comfortable trading at premium valuations. So, if robust top and bottom-line growth continues, I don't see why it couldn't be priced at a premium to peers further. The other point I'd like to highlight is that the market remains forward-looking. So, if for instance CRCL manages to expand its margins, the bottom-line growth could accelerate. And that could be another argument for repricing higher. Quite frankly, on a forward Price to Sales basis, Circle trades at 9.12 . While that's about a 2.5x premium versus peers at 3.63, I think that's insignificant. Why? Now, Wall Street analysts are forecasting at least double-digit top line growth until the end of the decade. And from FY2027 to FY2029 at least 20% revenue growth annually. And I am in the camp Circle may achieve this. Given the USDC adoption and favorable development of digital asset legislation, I wouldn't be shocked by CRCL achieving this. Of course, that's not guaranteed. And I am excited to see whether this materializes. But steady and consistent growth is something that deserves a premium multiple in my opinion. CRCL: Capital Structure (Seeking Alpha) There's one more thing that supports an elevated valuation. Now, Circle has a low-leveraged capital structure. With $1.5 billion in cash it could pay its total obligations of nearly $15 million with ease. I love this, as management has financial flexibility if that's needed. So far, Circle has been an outstanding revenue growth story. Over the past 12 months the company delivered 51% top line growth . That's more than 4.5x outperformance versus the sector median at 11%. Again, CRCL currently trades at 2.5x premium in terms of forward P/S versus peers but grows revenue at a 4.5x higher rate. If anything, this argues there's room for multiple expansion. On top of this, I'd like to point out that Circle's forward diluted EPS growth rate of nearly 76% exceeds the sector median at 17% by 4.5x, too. If bottom-line growth accelerates, that again would be supporting multiple expansion from here. CRCL: Revenue (TTM) (YCharts) So, clearly the stock isn't cheap at the current valuation. But in my opinion there are reasons behind its earnings multiple. And if strong performance were to continue, alongside solid adoption of digital assets and stablecoins, CRCL could secure its success for the years to come. And the forward-looking markets may be willing to reprice it higher. Why I Could Be Wrong Here? Absolutely there's a scenario where my bullish thesis fails. I'd like to share with you a few concerns. Now, obviously Circle isn't a cheap stock. And this could weigh on the stock price. Given the valuation, management has little room for error. So, if it were to happen that the guidance comes in weaker than anticipated or USDC adoption slows down, the market may not be willing to reprice it higher. I love to see margins increase for CRCL. But that's not guaranteed in the future quarters. If anything, I think investors are fine with a premium valuation just because of margin growth. As it raises hopes for bottom-line acceleration, the forward-looking markets are pricing in what could happen over the next few years. But if margins were to peak or drop from the current levels, there's surely room for correction in the stock price. Higher interest rates for longer is another risk in my opinion. So, Circle is a volatile and high risk name. As a result, if the FED maintains elevated funding rates further, the broader market may be clouded by risk-off sentiment. This could ignite a correction or consolidation for high beta names. However, I am not in the camp of this. If the Middle East conflict settles, I may find inflation rebound transitory. And the forward-looking markets may be fine with looking past it. Despite a Run-Up, I Maintained My Rating Sure enough, I am happy with the development of Circle's bull case, so far. But I view the company as a multi-year opportunity. I am in the camp that the stablecoin revolution is just beginning, and given the growth in USDC circulation, I am arguing Circle remains at the forefront of it. Now, it's surely not the cheapest company. But I believe it deserves its earnings multiple. And if anything, I wouldn't be shocked by a rerating higher if bullish thesis develops favorably, too. As I pointed out, there are a few catalysts that could help ignite another rally for Circle. So, I have decided to maintain my rating as a Strong Buy. Wall Street analysts seem to agree with me. They have a $146 price target , indicating a 29% upside potential. I also think CRCL could outperform the benchmark. But we will see what happens next.
