Core Insights - Circle (CRCL) may face revenue challenges if U.S. interest rates decline sharply, but strong demand for stablecoins and operational leverage could mitigate the impact [1][4] - The broker Bernstein projects that a 25 basis point decrease in rates could reduce 2027 revenue by approximately 9% and EBITDA by 11% [1] - Circle's USDC supply is expected to exceed the $170 billion base case even in a low-rate environment, driven by increased risk appetite and demand in crypto markets [3] Revenue and Market Projections - Analysts predict that total industry stablecoins will grow to around $670 billion by 2027, primarily due to the expansion of crypto capital markets [3] - Circle's market share of USDC is anticipated to rise to 33% by 2027, with operating margins expected to widen to 51% from 43% between 2024 and 2027 [3] - Other revenue streams related to integration and transaction services are also increasing, projected to reach 9% of total revenue in a bear case scenario [4] Stock Performance and Ratings - Bernstein maintains an outperform rating on Circle stock with a price target of $230, despite the stock being down 2.3% to around $134.40 in early trading [2]
Circle Can Withstand Rate Cuts as Stablecoin Demand Grows: Bernstein