CRCL (CRCL.US) soared 16% and returned to 100 yuan, Circle (CRCL.US) broke with Arc and USDC

According to Woofun AI, CRCL (CRCL.US) shares have rebounded strongly and regained the $100 mark, and this recovery of the key price level has established Circle (CRCL.US)'s core focus in the current crypto market. The reversal in market sentiment is not an accident, but the result of multiple fundamental improvements and technical breakthroughs resonating, indicating that the stablecoin issuing giant is trying to reshape the growth narrative through business diversification after experiencing early valuation shocks. Investors are focused on whether it can transform USDC's stock advantage into a sustainable profit engine, and whether the Arc mainnet can truly open up new space for institutional-level applications.

This attempt at transformation from a single reserve interest income to a network effect is redefining Wall Street's valuation logic for Circle (CRCL.US). Notably, this rebound not only fixed the technical form, but also reflected the market's repricing of Circle (CRCL.US)'s ability to lay out on the dual circuit of compliance infrastructure and technological innovation. Its subsequent performance will directly depend on the efficiency of implementing the new business line and marginal changes in the regulatory environment.

The market performance on September 3 was extremely dramatic. CRCL (CRCL.US) closed at $103.23, a single-day increase of 16.46%, hitting an intraday high of $103.28. The closing price was only $0.05 below the intraday high, showing strong bullish momentum. In the same period, the industry benchmark Coinbase (COIN.US) also closed up 10.14% to $192.70, but CRCL (CRCL.US) significantly surpassed that of its peers. Going back a month ago, CRCL (CRCL.US) closed at $60.35 on August 3, with a cumulative rebound of about 71% on September 3. This sharp fluctuation highlighted the rapid correction of market expectations. Bitcoin, as a weather vane for crypto assets, rose 5.02% to about $8.12 million on the same day, and once rose to $8.23 million intraday, becoming a direct catalyst for the rise of crypto concept stocks.

However, the deeper reason for the strengthening of CRCL (CRCL.US)'s independence lies in substantial progress in its fundamentals: in the past two months, Circle (CRCL.US) has successively obtained trust licenses from the US Federation and New York State, further deepening the compliance moat; the USDC business has maintained steady growth, while the high-profile Arc public mainnet is scheduled to be launched on September 16. These favorable factors have jointly boosted the market's long-term expectations for the company, making it supported by value revaluation in addition to short-term transactional purchases.

This strong rebound is essentially a repair to the sharp decline in the market from June to early August. At the end of June, the Open Standard Alliance announced OUSD, a stablecoin supported by more than 140 companies. This change in the competitive landscape caused market panic, causing CRCL (CRCL.US) to plummet 17.5% in a single day.

Meanwhile, Morgan Stanley (MS.US) drastically lowered its target price from $106 to $38 in early August. Its bearish logic is mainly based on three points: the diversion of demand for traditional stablecoins from tokenized money market funds, direct competitive pressure brought about by OUSD, and signs of a slowdown in USDC growth. These negative factors once suppressed Circle (CRCL.US)'s valuation cap, causing investors to doubt the sustainability of its revenue growth.

However, as subsequent financial data was revealed and new business developments became clear, some pessimistic expectations were falsified or weakened. In particular, the continued expansion of USDC's scale proved that it still has strong user stickiness and network effects in the face of emerging competitors. This provided a solid fundamental basis for stock price recovery, and also prompted the market to re-evaluate the extent of the impact of the Open Standard Alliance on Circle (CRCL.US)'s actual market share.

Judging from financial data, the expansion in the scale of USDC has effectively offset the revenue pressure brought about by some interest rate cuts. Circle (CRCL.US)'s core business model is to use cash supporting USDC and interest generated from short-term US bonds as the main source of revenue. Therefore, the larger the circulation of USDC, the more reserve assets can be allocated; however, falling US bond yields will depress revenue generated by the same reserve size. By the end of the second quarter of 2026, USDC's circulation volume was $73.3 billion, up 19% year over year, and quarterly on-chain transactions reached $14.8 trillion, up 151% year over year.

According to data compiled by Woofun AI, Circle (CRCL.US)'s total revenue and reserve revenue for the quarter was 701 million US dollars, up 7% year on year, of which reserve revenue was 668 million US dollars, accounting for about 95%; net profit was 48 million US dollars, and adjusted EBITDA was 143 million US dollars. Average USDC circulation increased 25% year over year in the second quarter. This increase successfully offset part of the 66 basis point decline in return on reserve assets, allowing reserve revenue to eventually achieve a 5% year-on-year increase.

In addition, Circle Payments Network's annualized transaction volume over the past 30 days reached US$14.7 billion over the same period, an increase of 76% over the previous period, and the number of connected financial institutions increased to 175.

Although revenue from payment networks, technology services, and transactions is still in its early stages, with other revenue of $34 million for the quarter, its rapid growth trend indicates that Circle (CRCL.US) is gradually moving away from reliance on single interest income. Notably, Circle (CRCL.US)'s total distribution, transaction, and other costs in the second quarter were $412 million, with distribution costs paid to Coinbase (COIN.US) as high as $324.6 million, which means that if USDC's growth mainly comes from exchanges and partners that require revenue sharing, a large portion of the additional reserve revenue will go to the channel side, which puts potential pressure on profit margins.

To expand its growth engine, Circle (CRCL.US) takes a multi-pronged approach on payment cooperation, sports marketing, Arc mainnet ecosystem, and compliant patent layout. BNY (BK.US) has connected USDC escrow, minting, and redemption to its digital asset escrow platform, and Nium has connected Circle Payments Network to local payment networks in more than 190 countries and 100 currencies, greatly expanding USDC's global application scenario.

On August 28, Circle (CRCL.US) became Chelsea FC's main partner. The USDC logo will appear on the front of men's, women's, and youth team jerseys, and the brand launch will begin to extend from crypto users to global sports audiences, aiming to raise public awareness. Another major highlight is the Arc mainnet, which is scheduled to open a public mainnet on September 16. Arc is a layer 1 for stablecoin payments, foreign exchange, and tokenized assets. It uses USDC to pay gas, provides sub-second final confirmation, optional privacy features, and is compatible with Ethereum development tools.

In August, Circle (CRCL.US) announced 11 founding validators, including BlackRock (BLK.US), DTCC, Galaxy (GLXY.US), ICE (ICE.US), Mastercard (MA.US), Visa (V.US), Standard Chartered, and SBI Group. BlackRock (BLK.US) plans to deploy the tokenized money market fund BUIDL to Arc; DTCC plans to support the tokenization and stablecoin settlement of its custodial assets on Arc starting in the second half of 2027. The Arc private mainnet currently has more than 100 agencies and ecosystem builders participating.

Additionally, the US Monetary Authority approved Circle (CRCL.US) to establish a national trust bank Circle National Trust on July 10, and the New York State Department of Financial Services approved Circle New York Trust to obtain a limited-purpose trust license on July 31. On August 6, Circle (CRCL.US) added native USDC and CCTP, the cross-chain transmission protocol, to OKX's X Layer. The acquisition of the IBM (IBM.US) blockchain patent portfolio on July 27 made Circle (CRCL.US) the company with the most blockchain patents in the US. Together, these steps created a long-term competitive barrier.

Despite improvements in fundamentals, the market still has significant differences in its valuation. CRCL (CRCL.US) rose back to $100, corresponding to a market capitalization of around $262 billion, but still below the 52-week high of $159.47. Bernstein maintained a buying rating and a target price of $140 on August 31, believing that stablecoin payments, RWA, and AI proxy payments can continue to expand USDC demand; while Goldman Sachs (GS.US), Wolfe Research, and Morgan Stanley (MS.US) have recent price targets of $81, $65, and $37, respectively.

Institutions offering lower target prices are mainly concerned about three types of pressure: interest rate cuts directly reduce the return on reserve assets; channels such as Coinbase (COIN.US) have strong share bargaining power; and new stablecoins such as Open USD may compete for the balance of exchanges and payment institutions. Circle (CRCL.US) revenue increased 7% in the second quarter, significantly lower than the 151% increase in USDC on-chain transaction volume, indicating that on-chain activity has not yet been converted into company revenue at the same rate. The next two weeks will be a key point: on September 15, the US Senate is expected to hold a key procedural vote on the crypto market structure bill, and the Arc public mainnet will go live the next day. These two events will continue to affect CRCL (CRCL.US)'s regulatory premiums and growth expectations, and determine whether its valuation is closer to the optimistic range or is constrained by bottlenecks in profit transformation efficiency.