$CRCL:Maintain HOLD and Decreases PT to $140
$Circle Internet Corp.(CRCL)$ - 3Q25 Preview: USDC Circulation Growth Continues, but Lower Yields Cap Reserve Income; Maintain HOLD and Decreases PT to $140
Tiger Research maintaining HOLD rating but decreasing PT to $140 (was $180) ahead of CRCL’s 3Q25 earnings.
According to CoinMarketCap, the average USDC in circulation reached $67.9B in 3Q25, up 11% q/q from $61.0B in 2Q. The quarter-end balance stood at $73.9B, up 21% q/q from $61.3B, likely driven by increased institutional adoption and a moderate crypto market rebound. For 4Q to date, USDC circulation has increased by $2.3B from October 1 to October 20, maintaining a healthy growth pace.
From an industry standpoint, total fiat-backed stablecoin circulation rose from $222.8B as of June 30 to $255.7B as of September 30, up 15% q/q. USDC’s market share expanded from 27.5% to 28.9% during 3Q and currently stands at 28.7%, while USDT’s share declined from 70.8% to 68.3%, recovering modestly to 68.5% since quarter-end. As noted in our initiation report, we believe USDC’s share gains are sustainable, underpinned by its position as the largest compliant digital dollar. We continue to model USDC’s market share reaching above 31% by 2026.
On the yield side, the average 3-month U.S. Treasury yield was 4.20% in 3Q, down 13bps from 2Q. We model CRCL’s reserve return rate at 4.03%, reflecting the same 13bps decline, translating to reserve income of $684M, up 8% q/q.
We do not expect meaningful growth in non-reserve revenue this quarter, modeling a 20% q/q decline driven by fluctuations in integration service fees, which represent roughly 3% of total revenue. That said, we remain constructive on CRCL’s strategic initiatives, particularly in payments, though we expect revenue contributions to materialize gradually.
From a macro perspective, the market currently expects the Fed funds rate to fall to 2.75–3.00% by September 2026 and stabilize thereafter — a view we adopt as our base case. Accordingly, while our 2026E average USDC circulation forecast rises 6%, our year-end reserve return rate is revised down 35bps, resulting in a 4% lower reserve income estimate.
Overall, following the recent pullback, CRCL continues to trade at a premium (~50x our revised 2026E EBITDA). Given the company’s strategic optionality and steady core performance, we view the stock as fairly valued at current levels.
Estimates Revisions. Increasing 3Q revenue estimates by 4%, non-GAAP EBITDA by 13%. Increasing 2025 revenue estimate by 2%, and non-GAAP EBITDA by 6%. But decreasing 2026 revenue estimate by 3% and EBITDA estimate by 3%.
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- Venus Reade·2025-10-23T-minus 20 days till blow out earnings and especially exponential guidance. Typical coordinated manipulation on down market day. ENORMOUS UPSIDE - avg analysts price target at 173. Will overshoot to 200+ by 11/11.LikeReport
- Mortimer Arthur·2025-10-23This baby starting to take off. Congratulations to whoever got in below 125.1Report
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- Megan Barnard·2025-10-2350x 2026 EBITDA is steep—fair value call makes total sense!1Report