Circle rises 8% as Bitwise sees stablecoin market reaching $5 trillion

Circle Inc. shares rose more than 8 percent to $72 on Tuesday after Bitwise Asset Management's head of research said investors are underestimating the stablecoin issuer's growth as the market heads toward trillions.

"The stablecoin market will grow from roughly $300 billion to $3 trillion to $5 trillion," Ryan Rasmussen, head of research at Bitwise, said in an interview with CoinDesk. He added that Circle's expansion into payments infrastructure is being "very mispriced by the market."

Rasmussen said Circle is well positioned as US stablecoin regulation takes shape, with its existing market share and brand recognition giving it a head start. He projected payments infrastructure becoming a second major business line, comparing Circle's potential trajectory to global payments giants including Visa and Mastercard.

The key question over the next year, Rasmussen said, is how Circle's economics change as stablecoin adoption grows and its Arc blockchain — a layer-1 network designed to support stablecoin settlement — gains traction.

Payments Infrastructure as the Second Business

Rasmussen's thesis extends beyond reserve-based revenue from increased issuance. Circle is building infrastructure to settle payments within a stablecoin-driven financial system, a business line he argues investors have not priced in. Within five years, he said, Circle could be "not only a stablecoin giant, but a payment giant."

The company's USDC is the second-largest stablecoin by market capitalization, trailing Tether's USDT. A clearer US regulatory framework could give Circle a compliance advantage over offshore rivals, Rasmussen said, as banks and payment firms seek regulated settlement rails. The stablecoin market has become a bridge between traditional finance and digital assets, with cross-border payments and blockchain settlement among the fastest-growing use cases.

OpenUSD and the Competitive Field

Rasmussen does not view new entrants as an immediate threat. OpenUSD, an initiative by OpenStandard that includes more than 140 payments and crypto companies such as Visa and BlackRock, "will not be a major threat" to Circle, he said. He argued the overall market could expand fast enough for Circle to grow even as banks and consumer companies prepare their own stablecoins.

Rasmussen framed the involvement of established financial players as evidence of growing interest in stablecoins rather than a competitive risk. Circle's advantage, he said, is its ability to keep executing as the regulated stablecoin market develops.

The forecast implies a revaluation of Circle's payments infrastructure as the stablecoin market scales. If the market reaches $3 trillion to $5 trillion, stablecoin settlement activity would rise sharply, potentially placing Circle alongside established payments networks. Investors should watch whether Arc is adopted and integrated into the traditional financial system, and how Circle's revenue mix shifts from issuance toward settlement fees. For the broader sector, the trajectory hinges on how quickly US regulators finalize stablecoin rules and whether new entrants can capture meaningful share.

This article is for informational purposes only and does not constitute investment advice.