Mizuho Securities analysts Dan Dolev and Alexander Jenkins raised the price target for stablecoin issuer Circle to$100 from $90 on July 23, maintaining a “neutral” rating. The move comes as Middle East tensions escalate sharply — U.S. and Israeli airstrikes on Iran sent Brent crude soaring 17% in five trading days, stoking renewed inflation fears.
Oil Surge Freezes Rate Cuts, Circle Rides High-Yield Tailwind
CME FedWatch data shows the probability of the Fed holding rates steady in March jumped to 97.45%, while odds of a 25-basis-point cut fell to just 2.6%. Circle benefits because it issues the non-interest-bearing stablecoin USDC and invests the reserves in Treasury bills and reverse repos, pocketing the spread. Higher rates directly widen that spread.
Circle’s 2025 financials confirm the trend: total revenue and reserve income reached $2.7 billion, up 64% year-over-year; USDC in circulation stood at $75.3 billion, up 72%. The Strait of Hormuz disruption, after Iran's threat to close the chokepoint, pushed energy prices even higher, reinforcing the case for prolonged high rates — a clear positive for Circle's earnings model.
Near-Term Gains vs. Long-Term Risks: Regulation and Competition Loom
The report also flags risks. As stablecoin regulation solidifies globally, more competitors are likely to enter the market, compressing Circle's margins. And the deep linkage between crypto and macro means a prolonged Middle East slowdown could hit risk assets. Circle is not standing still: it recently acquired Axelar's technology (but not its token, triggering a selloff in AXL), and Bermuda launched a pilot to accept USDC for tax and fee payments with Circle and Coinbase. These moves show Circle is betting on compliance-first expansion even as near-term tailwinds blow.