Bernstein: USDC growth could restart; sets $140 Circle target

Circle is catching the attention of Wall Street analysts again, with Bernstein arguing that USDC is entering a fresh growth phase that could lift the company’s performance over the next year. In a research note published Monday, the firm said USDC is showing signs of what it called “digital dollar reflation,” after supply jumped by roughly $2 billion in seven days—an apparent turnaround from a six-month period of stagnant or declining growth.

Bernstein maintained an Outperform rating on Circle and set a $140 price target, implying around 60% upside from current levels. The stock has reportedly risen about 40% over the past month, underscoring how quickly market sentiment can shift around stablecoin issuance and adoption.

Key takeaways

• Bernstein cited USDC supply increasing by roughly $2 billion in seven days, reversing a prior stretch of flat or falling growth.
• The firm expects a potential “next phase” for stablecoins to be driven by market momentum, U.S. regulatory clarity, and tokenized capital markets.
• Bernstein said USDC’s share of adjusted stablecoin transaction volume rose from about 40% in 2025 to more than 60% so far in 2026, overtaking USDt by that measure.
• Analysts highlighted early signals of stablecoin payments being used by artificial intelligence agents.

Why Bernstein thinks USDC momentum matters

Stablecoin growth is often measured in multiple ways—issuance, liquidity, and real-world transaction usage. Bernstein’s central argument focuses on issuance acceleration: a $2 billion increase in USDC supply over just one week suggests demand for dollar-denominated on-chain settlement is picking up again. The note frames this as “digital dollar reflation,” implying that the on-chain dollar supply is expanding in a way that may support broader ecosystem activity.

For investors, the implication is straightforward: renewed stablecoin issuance can translate into more business for Circle, particularly if new supply is associated with greater on-chain usage and related enterprise adoption. Bernstein also points to a broader set of catalysts beyond one-week supply growth—elements that, if they materialize, could help make the rebound more durable rather than episodic.

Drivers: regulation, tokenized markets, and payments

Bernstein outlined several potential contributors to a stablecoin “growth cycle.” First, it pointed to renewed momentum in crypto markets, which can raise risk appetite and increase the volume of on-chain activity where stablecoins serve as settlement rails. Second, it highlighted the possibility of greater regulatory clarity in the United States—an area that has long been a variable for stablecoin issuers, exchanges, and payment integrators trying to scale compliant services.

Third, Bernstein linked stablecoin expansion to tokenized capital markets—an umbrella term for the use of tokenized instruments and on-chain infrastructure for financial services. If more of these workflows use stablecoins as a unit of account or settlement asset, transaction volume could increase meaningfully. Finally, Bernstein pointed to growing stablecoin adoption for payments, suggesting that stablecoins are moving beyond trading and into everyday transfer use cases.

The analysts also referenced “early signs” of stablecoin use in payments made by artificial intelligence agents. While still emerging, the idea matters because AI-driven workflows could introduce new automation patterns for transfers—potentially increasing the frequency and diversity of stablecoin payment demand over time.

USDC’s transaction share rises while USDt slips in that metric

Although USDC is still the second-largest dollar-backed stablecoin by market capitalization—behind Tether’s USDt—Bernstein argued that USDC is gaining ground in actual transaction activity. According to the firm, USDC’s share of adjusted stablecoin transaction volume rose from roughly 40% in 2025 to more than 60% so far in 2026. On that basis, USDC has reportedly overtaken USDt.

This distinction is important because it separates “size” from “usage.” A stablecoin can lag in total market cap yet still lead in transaction throughput if it becomes the preferred settlement asset for certain applications or platforms. For Circle, a rise in transaction share can signal improvements in distribution, integrations, and user behavior—even if headline supply growth is the first datapoint drawing attention.

Circle stock performance and fundamentals since IPO

Bernstein’s bullish view arrives during a period of noticeable stock volatility for Circle. The company went public in June 2025, pricing its shares at $31 and raising about $1.1 billion in its initial public offering. After a strong early period, the shares slid back toward their IPO level by November 2025 as broader crypto market weakness weighed on publicly traded companies exposed to the sector.

Despite that volatility, Circle has continued to report improving results on an annual comparison basis. In its most recent quarter, the company reported $701 million in revenue and $48 million in net income, both up from a year earlier. The persistence of year-over-year improvement can matter for how equity markets interpret a stablecoin growth rebound—especially when traders are trying to balance short-term issuance trends against longer-term profitability.

As stablecoin demand patterns evolve, investors may focus not only on supply but also on which networks and use cases drive transaction volume. Bernstein’s emphasis on USDC overtaking USDt on adjusted transaction share suggests that, at least for now, usage dynamics are shifting in Circle’s favor.

What to watch next is whether the “digital dollar reflation” signals translate into sustained growth beyond a one-week supply jump—particularly as policy clarity and payment and tokenization adoption progress. If USDC continues to lead transaction share while issuance remains steady, Bernstein’s thesis could gain more traction; if not, the current rebound may prove temporary.