Circle Internet Group (NYSE: CRCL), the second-largest issuer of USD-backed stablecoins, is poised to transition from being a foundational payment rail in crypto to a dominant financial layer of the internet itself, according to analysts.
Despite its lofty valuation following its IPO, many on Wall Street see strong growth potential in the coming years.
Circle’s USD Coin (USDC) is fully backed by interest-yielding US Treasuries, which provide the bulk of the company’s revenue. The company also shares revenue with its key partner, Coinbase, which helped bring USDC to the forefront of stablecoins.
Bernstein SocGen’s Gautam Chhugani recently gave Circle an ‘Outperform’ rating and set a $230 price target. He praised Circle for building a best-in-class stablecoin network with strong regulatory compliance, liquidity advantages, and elite distribution channels. He believes stablecoins are evolving into essential infrastructure for the broader internet economy.
Chhugani estimates the total addressable market (TAM) for stablecoins will explode from today’s $225 billion to $4 trillion over the next decade.
Meanwhile, Oppenheimer’s Owen Lau rated the stock as ‘Perform’. He noted USDC holds 24% of the global market share and called Circle a “clean” entry point for investors looking to tap into blockchain’s potential in money markets, real estate, payments, and capital markets.
Goldman Sachs’ James Yaro offered a more cautious take, issuing a ‘Neutral’ rating and an $83 price target due to the stock’s massive post-IPO surge. Still, Yaro forecasts USDC supply to grow at a compound annual rate of 40% between 2024 and 2027, with Circle’s revenue expected to expand at a 26% CAGR over the same period.
At the time of writing, CRCL shares are hovering around $185, with analysts split between high-growth optimism and valuation skepticism.
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