Circle Shares Surge Another 7% After It Tops Revenue Expectations on Strong Stablecoin Circulation

Circle surpassed Wall Street expectations for fourth quarter revenue on Wednesday, as income from reserves got a boost from a rise in circulation of its stablecoin token. Its shares rose another 7% on Thursday after a 35% rally in prior trading session.

USDC, Circle's primary stablecoin, is seeing a surge in adoption as favorable regulations such as the GENIUS Act, which was signed into law by U.S. President Donald Trump last year, establish a federal framework for dollar-pegged stablecoins.

Regulators around the world have also stepped up frameworks to oversee these digital assets, paving the way for their broader adoption and benefiting issuers such as Circle.

USDC is a token pegged to the U.S. dollar, backed by reserves of cash and other low-risk assets such as U.S. treasuries that tether its market price close to the benchmark of $1.

Circulation of USDC rose 72% from a year earlier to $75.3 billion in the fourth quarter, lifting total revenue from reserves to $733 million.

The firm earns revenue by investing the cash received for its issued tokens in low-risk assets such as U.S. treasuries and deposits and pocketing the yield.

It has recently struck key partnerships, including with payments giant Visa, allowing U.S. institutions to settle transactions using USDC. It has also positioned itself in the prediction markets through a tie-up with Polymarket.

During the quarter, Circle received preliminary approval to establish a national trust bank charter, a major move that could further integrate digital assets into the banking system.

Total revenue and reserve income rose 77% to $770 million, beating analysts' average estimate of $739 million, according to data compiled by LSEG.

Total on-chain transaction volumes in USDC rose 247% to $11.9 trillion.