Circle's Q2 Earnings to Reveal Fate of Stablecoin Market

Circle is set to report its second quarter earnings on August 5, and analysts expect revenue of approximately $720 million and an EPS of about $0.165. However, the real question on everyone's mind is whether growth has peaked for the stablecoin market leader.

USDC supply ended the second quarter at around $73 billion, down from $77 billion in Q1. This sequential decline is a significant concern, as Circle's business model relies heavily on reserve asset interest income, which accounts for over 95% of total revenue. The company's stock has already taken a hit, closing at $61.36 on July 29, far below earlier highs.

The launch of Open USD in July has added to the pressure. This new stablecoin is backed by more than 140 companies, including Visa, Mastercard, Coinbase, and BlackRock, and offers fee-free minting and redemption, as well as revenue sharing with reserve holders. This model directly attacks Circle's reserve income economics.

Analysts are revising their estimates for USDC supply, with Bernstein cutting its target from $190 to $140, citing the competitive landscape and the decline in period-end supply. The firm also lowered its 2028 USDC supply estimate from roughly $290 billion to about $170 billion.