Bernstein Flags New USDC Growth Cycle, Sets $140 Price Target for Circle

Circle is drawing fresh investor attention as analysts at Bernstein argue that USDC is entering a new expansion phase—one that could translate into meaningful momentum for the stablecoin issuer over the next year. In a research note published Monday, the firm pointed to a sharp pickup in USDC supply growth and an improvement in the stablecoin’s role within dollar-backed payments.

Bernstein said USDC is showing signs of what it called “digital dollar reflation” after its supply rose by roughly $2 billion in seven days, reversing a six-month stretch of stagnant or declining growth. The brokerage reiterated an Outperform rating on Circle and a $140 price target, implying about 60% upside from current levels. Circle shares have risen roughly 40% over the past month.

Key takeaways

• Bernstein cited a roughly $2 billion USDC supply increase over seven days, calling it “digital dollar reflation.”
• The firm maintained a $140 price target on Circle and an Outperform rating, expecting a boost over the next 12 months.
• Bernstein said USDC’s transaction presence improved, with its share of adjusted stablecoin volume rising from about 40% in 2025 to more than 60% so far in 2026, surpassing USDt by that metric.
• Analysts pointed to catalysts including renewed crypto market activity, clearer US regulation, tokenized capital markets, and stablecoins gaining traction in payments.
• Bernstein also noted early signs that AI agents may be using stablecoins in payments.

USDC supply and “digital dollar reflation”

The crux of Bernstein’s bullish case is an apparent shift in USDC’s growth dynamics. After months in which supply growth was described as stagnant or negative, the firm highlighted a sudden acceleration—about $2 billion added to USDC supply in just one week. For investors, that kind of reversal matters because stablecoin supply growth can be a leading indicator of broader on-chain and off-chain usage, which in turn can support the economics of issuance and ecosystem activity.

Bernstein’s note framed the move as “digital dollar reflation,” suggesting that demand for dollar-denominated digital assets may be strengthening again. The firm did not position this as a one-off event, instead describing it as the beginning of a broader growth cycle that could play out over the next year.

Why transaction share may be the bigger story

Beyond supply, Bernstein emphasized USDC’s increasing share of stablecoin transaction activity. While USDC remains the second-largest dollar-backed stablecoin by market capitalization, it trails Tether’s USDt (USDT). Still, Bernstein argued that USDC has gained ground in transactions, not just valuation.

According to the note, USDC’s share of adjusted stablecoin transaction volume rose from roughly 40% in 2025 to more than 60% so far in 2026, overtaking USDt on that measure. That matters because transaction volume is often treated as a proxy for real usage—transfers, swaps, and payments—rather than purely for holding patterns.

Put differently, Bernstein’s thesis suggests a divergence: even if USDC doesn’t lead by market cap, it may be winning by activity. Traders and businesses usually care about that distinction when stablecoins are used for settlement, routing, and payments where liquidity and flow can influence costs and reliability.

What Bernstein says could fuel the next growth cycle

Bernstein attributed the potential next phase of stablecoin growth to several overlapping factors. In its view, improved sentiment toward crypto more broadly could lift demand for stablecoins, while greater regulatory clarity in the United States could remove friction for issuers, partners, and regulated institutions.

The analysts also pointed to the expansion of tokenized capital markets and growing stablecoin adoption for payments. In practical terms, tokenization and payment use-cases can increase stablecoin demand by embedding dollar-denominated tokens into workflows that previously relied on bank transfers, prepaid balances, or legacy settlement rails.

Notably, Bernstein added that there are early signs of stablecoin use in payments made by artificial intelligence agents. While still an early signal, it aligns with a broader market pattern: as automation increases the number of transactions performed by software, stablecoins can become the unit of account for machine-to-machine payments—especially when they need dollar stability rather than crypto volatility.

Circle’s IPO-era volatility and recent fundamentals

Circle’s stock performance has reflected the volatility of public crypto exposure since it went public in June 2025. Bernstein’s note highlighted that the company priced shares at $31 in its IPO and raised roughly $1.1 billion. After an initial surge, the stock retreated toward its IPO level by November 2025 as the wider crypto market downturn weighed on publicly traded companies with sector exposure.

More recently, Circle has continued to report improved financial results. In its most recent quarter, the company reported $701 million in revenue and $48 million in net income, both higher than a year earlier.

For investors evaluating Bernstein’s stablecoin-growth thesis, that backdrop is important: improved operating performance can make it easier for markets to underwrite management’s ability to monetize stablecoin expansion rather than treating it as a purely narrative-driven trade.

Payments, regulation, and the “share of volume” test

Stablecoins sit at the center of several current crypto narratives—regulated dollar settlement, faster payment rails, and the infrastructure layer for tokenized finance. Bernstein’s emphasis on USDC’s transaction share suggests the firm believes the market is now grading stablecoins less on who is biggest by market cap and more on who is being used most in day-to-day activity.

At the same time, the regulatory and adoption catalysts Bernstein cites remain subject to real-world implementation and policy outcomes. That is why the near-term data points investors are likely to watch are continued supply growth, sustained improvements in transaction volume share, and evidence that payments use-cases—whether human-facing commerce or automation-driven transfers—are broadening beyond early experimentation.

For now, the debate centers on whether USDC’s recent supply acceleration and its rising share of transaction volume represent the start of a durable trend. If those metrics continue to climb while Circle’s fundamentals hold up, Bernstein’s “next 12 months” bet could look increasingly credible; if they fade, the market may revert to treating stablecoin growth as cyclical rather than structural.