By Pritam Biswas
May 11 (Reuters) – Circle reported higher quarterly revenue and reserve income on Monday, driven by increased adoption and circulation of its stablecoin, pushing its shares 2% higher in early trading.
Market volatility and the Middle East conflict pushed investors to rotate out of risky cryptocurrencies and into stablecoins to park capital earlier this year.
This was underscored by cryptocurrency exchange Coinbase’s results last week, which reported dropping trading volumes. Coinbase has a strategic partnership with Circle.
The rollout of Europe’s MiCA framework and the passing of the U.S. GENIUS Act, which provide a clear legal framework for digital assets, boosted the adoption of USDC, Circle’s flagship stablecoin and the world’s second-largest by market value after Tether.
Circulation of USDC rose 28% from a year earlier to $77 billion at the end of the first quarter. Total revenue and reserve income grew 20% to $694 million.
“From a long-term perspective, it’s tough to be bearish on Circle Group,” said Andrew Rocco, stock strategist at Zacks Investment Research.
Wall Street expects stablecoins to become one of the biggest themes within finance in the coming years and the next multi-trillion-dollar market opportunity.
Interest-rate cuts late in 2025 also benefited the company, as Circle invests the cash backing its tokens in bank deposits and short-dated U.S. Treasuries, earning interest on those holdings. As a result, its income is highly sensitive to policy changes by the U.S. Federal Reserve.
“Rates have cycles, and we are building a company that’s going to be living through many rate cycles,” CFO Jeremy Fox-Green said in an interview with Reuters, when asked about the potential future impact of monetary policy easing.
The firm went public in a stellar debut on the New York Stock Exchange last year, paving the way for similar companies to test their luck in the public markets.
Circle’s shares closed at $113.67 on Friday, up about 43% year to date and more than three times their IPO price of $31.
(Reporting by Pritam Biswas in Bengaluru; Editing by Pooja Desai)
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