Circle Sees 59% Upside as Bernstein Predicts Stablecoin Expansion Cycle

After nearly six months of stagnation in stablecoin supply, Circle's stock price has rebounded 42% since its sharp drop triggered by concerns over OUSD competition.

A Bernstein research report from August 24 notes that this is not a short-term technical rebound. The expansion of on-chain capital markets and the widespread adoption of stablecoin payments are key factors driving a new stablecoin expansion cycle, with Circle positioned to benefit as the largest compliant stablecoin issuer in the US.

The report highlights four main drivers: the macro interest rate environment, the expansion of on-chain capital markets, the growth of stablecoin payments, and the emergence of AI agent payments. The x402 payment protocol, designed for AI agents, processed approximately 20 million transactions in August with a monthly trading volume of around $1 million.

Circle is benefiting from these trends due to its compliant status as a US issuer, attracting institutions such as BlackRock, DTCC, Mastercard, and Visa as founding validator nodes on its ARC blockchain. The blockchain supports asset tokenization and programmable finance, bringing traditional securities on-chain.