Circle reported stronger-than-expected third-quarter earnings on Wednesday, as rising circulation of its USDC stablecoin and higher reserve income boosted profitability. The company posted adjusted earnings of 36 cents per share, surpassing analysts’ projections of 22 cents, according to data compiled by LSEG. Total revenue rose 66 percent to $739.8 million, driven by the expansion of USDC, which saw its circulation more than double from the previous year to $73.7 billion. The results highlight the growing profitability of stablecoin issuers as global adoption accelerates, though Circle’s stock slipped 10 percent in early trading as investors weighed valuation pressures and growing competition in the digital payments sector. Analysts said the sharp rise in revenue underscored the strength of Circle’s business model amid a maturing regulatory environment, but warned that market expectations for continued growth may be difficult to sustain.
The company’s performance comes amid rapid institutional integration of stablecoins, as financial firms increasingly explore blockchain-based settlement solutions. The Trump administration’s Genius Act, passed earlier this year, has provided legal clarity for dollar-backed stablecoins, establishing capital, reserve, and disclosure standards aimed at ensuring financial stability. The new framework has prompted banks, asset managers, and fintech companies to expand their use of regulated tokens such as USDC for real-time payments and liquidity management. “This isn’t just crypto speculation anymore, this is the plumbing of digital finance getting laid brick by brick,” said David Bartosiak, an analyst at Zacks Investment Research. Circle’s ability to scale its stablecoin operations while maintaining compliance under new federal rules has positioned it as a leading player in the global shift toward tokenized finance.
Despite its financial strength, investor sentiment weakened following the company’s updated outlook. Circle revised its annual gross margin forecast to 38 percent, below prior expectations, signaling potential softness in the fourth quarter. U.S. Tiger Securities analyst Bo Pei attributed the decline in share price to concerns that margin compression and intensified competition could weigh on near-term performance. Market observers also cited uncertainty surrounding the potential launch of Arc, a new native token that could affect demand for USDC. Owen Lau, managing director at Clear Street, said the company’s valuation still reflects “elevated expectations” for growth, suggesting short-term volatility may persist even as long-term fundamentals remain intact.
Analysts agree that Circle’s growth trajectory mirrors the broader expansion of yield-bearing and utility-driven stablecoins in a market increasingly shaped by policy reforms and institutional inflows. With global stablecoin circulation reaching record levels, Circle’s success underscores how digital currencies are evolving from speculative assets into critical infrastructure for the financial system.
