Key Takeaways
- Mizuho Securities increased Circle’s price target to $100 from $90 while maintaining a “neutral” stance
- Rising oil prices and diminishing expectations for 2026 Fed rate cuts fuel the optimistic outlook
- Circle Internet (CRCL) shares surged to $103.71 Tuesday, marking a nearly four-month peak
- The company exceeded Q4 2025 earnings projections with $0.43 EPS versus $0.35 anticipated; USDC circulation expanded 72% annually to $75.3 billion
- Analysts warn of future challenges from increased stablecoin competition and possible margin pressure as regulatory frameworks attract new market participants
The USDC issuer finished trading at $96.14 on March 2, gaining 15%, before touching $103.71 Tuesday—its strongest performance in close to four months. Current trading levels hover near $102.
Dan Dolev and Alexander Jenkins, analysts at Mizuho, elevated their CRCL price objective to $100 from the previous $90 mark. Their investment rating remains “neutral.”
The revision followed heightened tensions between the U.S. and Iran that sparked weekend military actions, driving crude oil prices significantly upward. WTI crude climbed nearly 3% to reach $73.36 per barrel, while Brent Crude gained 3.23% to settle at $80.25.
Mizuho’s thesis is clear-cut: elevated oil translates to heightened inflation concerns, reducing the likelihood of Federal Reserve rate reductions. This scenario benefits Circle.
The Critical Role of Interest Rates
Circle generates the majority of its income through interest earned on reserves backing USDC. These reserves are predominantly allocated to short-duration U.S. Treasury securities and cash equivalents. Sustained higher rates preserve this revenue stream.
According to Mizuho, weaker rate-cut probabilities boost 2026 and 2027 revenue projections by approximately 1%. However, the valuation impact proves more substantial. The likelihood of zero rate cuts in 2026 nearly doubled within 24 hours, based on CME’s FedWatch data.
This transformation provides additional upside potential for Circle’s valuation multiple, the analysts explained.
Mizuho projects USDC circulation reaching approximately 123 billion by 2027, translating to roughly $3.7 billion in reserve-generated income and $922 million EBITDA. The firm assigns a 27x multiple—exceeding the ~19x peer average including Visa, Mastercard, Coinbase, and Robinhood—justifying their $100 price objective.
Impressive Q4 Results Provide Momentum
Circle’s fourth-quarter 2025 performance delivered strong results even before oil market developments emerged. The firm reported $0.43 earnings per share, surpassing analyst consensus of $0.35. Revenue for the quarter totaled $770 million.
USDC circulation reached $75.3 billion at year-end, representing 72% year-over-year growth. Late January figures show Circle’s USDC reserves contained $18.8 billion in U.S. Treasury securities, confirmed through Deloitte audit.
Share prices have jumped 65% following that earnings announcement.
CRCL began public trading June 5 last year, opening at $69—approximately 124% above its $31 IPO pricing. Investor demand exceeded supply by 25 times during the offering.
Sean Lee, advisor to the Crypto Council for Innovation, suggested crude oil sustained above $120 per barrel could “trigger inflation concerns,” potentially accelerating stablecoin adoption as traders favor dollar-pegged assets over traditional bank deposits.
While near-term prospects appear favorable, Mizuho identified long-term headwinds. Enhanced regulatory frameworks may attract additional competitors to the dollar-backed stablecoin sector, potentially eroding profit margins.
USDC commands a 24.3% share of the overall stablecoin marketplace, with market capitalization totaling $75.92 billion, according to DeFiLlama data.
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