Key Takeaways:
Bernstein set a $140 price target on Circle Internet Group, implying about 60 percent upside, as USDC supply rose roughly $2 billion in seven days after six months of flat growth.
Analysts led by Gautam Chhugani at Bernstein said the stablecoin issuer is entering a new growth cycle driven by stablecoin payments, tokenized capital markets and payments made by artificial intelligence agents.
USDC's share of adjusted stablecoin transaction volume rose from roughly 40 percent in 2025 to more than 60 percent so far in 2026, overtaking Tether's USDt by that measure, Bernstein said. Circle reported second-quarter revenue of $701 million and net income of $48 million, both up from a year earlier.
The $140 target compares with a closing price of $87.98 on Aug. 21, after Circle shares gained more than 5 percent in a single session. Bernstein said the growth cycle is independent of the CLARITY Act passing in the Senate's September session, with a vote expected Sept. 15.
USDC supply returns to growth after six flat months
USDC circulation increased by about $2 billion over the past week, reversing a stretch of stagnant or declining supply, according to Bernstein. The stablecoin serves as collateral across decentralized finance, tokenized equities, prediction markets and perpetual futures tied to real-world assets, with Bernstein estimating USDC accounts for about 80 percent of decentralized exchange trading and finance volumes.
Adjusted transaction volume, which excludes bots and high-frequency activity, reached about $11 trillion during 2025 and was running at an annualized pace of roughly $17 trillion through July 2026, up about 60 percent from a year earlier, the brokerage said.
Circle has expanded the institutional rails through which businesses use USDC. In July, the Office of the Comptroller of the Currency approved Circle National Trust, a federally supervised national trust bank for digital asset custody. Standard Chartered introduced direct USDC minting and redemption for institutional customers, while a July integration brought USDC settlement through Fireblocks, which said stablecoins accounted for 69 percent of transaction volume across its platform in the second quarter.
Agent payments add a new USDC demand source
Machine-to-machine payments form another part of Bernstein's thesis. Circle launched Agent Stack in May, infrastructure that lets software agents hold assets and make programmable payments. By the second quarter, 99.3 percent of x402 agent-payment volume was settling in USDC, Circle said. A Keyrock report found AI agents settled $73 million across 176 million transactions over 12 months, with USDC handling 98.6 percent of those payments.
CLARITY Act outcome does not change the thesis
Bernstein said the outcome of the CLARITY Act would not materially change its investment case. "We believe this growth cycle is independent of the Clarity Act passing in the September session," the analysts wrote. Failure to secure Senate support in the Sept. 15 vote could push the Securities and Exchange Commission and Commodity Futures Trading Commission to take a larger role in providing regulatory guidance, they said.
Circle faces competition as payment infrastructure expands. Open USD, a consortium structure that distributes reserve economics to participating companies, has emerged as a challenge, and Mizuho downgraded Circle to Underperform in July with a $50 target. Circle has added partners including Japan's JCB, South Korea's Kakao and Toss, and BNY's Digital Asset Custody platform.
This article is for informational purposes only and does not constitute investment advice.
