The analysts tied the adjustment largely to recent energy price gains following escalating Middle East tensions. West Texas Intermediate crude rose roughly 7% to 8% in recent sessions, while Brent crude advanced about 17% across five trading days.
Circle earns interest primarily from short-term U.S. Treasuries and other low-risk assets held to support USDC circulation. When rates remain elevated, those reserves produce larger yields and contribute more directly to the firm’s income.
Mizuho estimated that reduced expectations for Fed rate cuts could add roughly 1% to Circle’s revenue projections for both 2026 and 2027. The analysts also pointed to a rising probability that the Fed may avoid rate reductions entirely next year.
Markets appeared to take notice. Circle shares jumped more than 24% over the week leading into the Mizuho analyst’s note and gained another 6% on the day it circulated. On Wednesday, shares are up 4% a few hours before the closing bell.
The stock traded between roughly $101 and $103 during the latest session, reaching levels not seen in about four months. Presently, the rally has pushed shares beyond Mizuho’s newly minted price target.
Circle’s stock had previously fallen nearly 80% from highs reached in 2025 before staging the latest recovery. Analysts partly attributed the quick rebound to a short squeeze as investors repositioned around the earnings report.
FAQ Why did Circle’s stock rise this week? Circle shares gained after Mizuho raised its price target to $100 and cited higher interest rate expectations supporting revenue from USDC reserves. How does Circle make money from USDC? Circle earns interest on U.S. Treasury and cash reserves that back the USDC stablecoin. Why do higher interest rates help Circle? Elevated rates increase the yield on reserves backing USDC, boosting Circle’s interest income. What risks could affect Circle’s long-term growth? Growing competition and evolving stablecoin regulations could compress profit margins over time.
