Circle shares rose more than 15% on Wednesday after the company reported results that came in above its own guidance and ahead of analyst expectations. The stock climbed to $73, its highest level since January 28, rebounding sharply from its year-to-date low of $50.6. Its market capitalization moved above $15 billion.
The main driver was USDC. Circle said the amount of USD Coin in circulation increased 72% year over year to more than $75.3 billion. That expansion lifted total revenue by 77% to over $777 million. A large share of Circle’s business comes from investing stablecoin reserves in short-term government bonds and keeping the yield.
USDC growth lifted revenue across the quarter
Circle’s model differs from some other stablecoin issuers because it does not retain all of the interest income tied to USDC. The company said Coinbase keeps the interest generated by USDC held on its platform. Even so, Circle’s latest results showed stablecoin revenue rising to more than $350 million.
On a full-year basis, revenue increased 64% to more than $2.7 billion. Net loss, however, widened to over $424 million. According to the report, that loss was largely tied to the company’s public listing last year, including millions of dollars paid to firms involved in the process.
Arc, CPN, and EURC added to Circle’s expansion push
Circle also pointed to several operating milestones from the last quarter. It launched the public beta of Arc, its layer-1 chain focused on payments. The network has logged more than 100 participants and is processing over 2.3 million transactions per day.
Circle Payment Network kept expanding as well, adding 55 financial institutions, while another 74 were undergoing eligibility review. EURC also posted strong growth, reaching more than €310 million in assets, up 284% year over year. Circle said it also received a national bank charter in the United States, a step meant to strengthen the infrastructure behind USDC.
Recent supply decline raises questions about momentum
Strong earnings gave the stock a lift, but the company still faces clear pressure points. The report noted signs that USDC growth has stalled in recent months as the broader crypto market sell-off continued. Data compiled by CoinMarketCap showed the USDC supply has fallen in the past few months, with its market capitalization slipping to $74.94 billion.
If that trend continues, revenue growth could weaken because Circle depends heavily on income generated from its stablecoin reserves. Arc also carries execution risk. The layer-1 and layer-2 market is already highly concentrated, which could limit the project’s traction. At the same time, the stablecoin sector is getting more crowded at the top, with Ripple USD, PayPal USD, and USD1 all gaining share.