Circle stock jumped 22% in premarket trading on Tuesday, after the company reported a strong quarter and some encouraging news around stablecoins.
This was Circle’s first earnings report since its IPO in July, and it managed to beat revenue expectations, which has investors feeling pretty optimistic.
Since going public, the stock has more than doubled, showing growing confidence in Circle’s role in the crypto space. In the quarter, Circle brought in $658 million in revenue, slightly above the $647 million analysts were expecting.
The loss per share was $4.48 and the overall net loss was $482 million, partly because of costs related to the IPO.
A big part of the revenue boost came from Circle’s USDC stablecoin, which reached $61.3 billion in circulation by the end of June that’s almost 90% growth compared to last year.
And that number kept climbing, hitting $65.2 billion by August 10.
Circle stock bracing for next big move
CEO Jeremy Allaire highlighted some big steps the company’s taking, including the launch of a new blockchain network called ARC.
It’s designed to make stablecoin finance smoother by simplifying and stabilizing blockchain fees for businesses handling digital payments and capital markets.
ARC will be compatible with Ethereum’s Virtual Machine and will use USDC as its main gas token. This move shows Circle’s focus on building out the infrastructure needed to support the rising demand for stablecoins.
Circle’s momentum also got a boost from clearer regulations, especially with the bipartisan approval of the GENIUS Act (still waiting on final approval).
This legislation would set up rules for regulated stablecoins and digital tokens backed by assets like the US dollar. If it passes, it could be a real game-changer for Circle, which often operates in a space clouded by uncertainty.
Wall Street analysts are optimistic too, several have rated the stock a buy, pointing to significant upside as stablecoins are expected to grow into a multitrillion-dollar market in the years ahead.
Circle’s revenue gets a solid boost from interest earned on the Treasury bills that back its USDC reserves, which grew 50% year-over-year. Reserve income hit $634 million, mainly thanks to the expanding stablecoin ecosystem.
The company also benefits from a revenue-sharing partnership with Coinbase tied to USDC transactions.
What analysts say?
Retail investors are showing growing enthusiasm too. Social media buzz around the stablecoin space and Circle’s earnings has turned noticeably bullish.
The pre-market jump in the stock price matched a clear shift from bearish to bullish sentiment in investor chat forums.
That said, some analysts are urging caution. Rising distribution costs and mounting competition from traditional banks and fintechs launching their own stablecoins could pose challenges.
Still, most agree the stock’s outlook looks positive, backed by Circle’s leading role in stablecoins and its ongoing push for innovation.
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