Bernstein confident Circle sustains growth, unconcerned by Hyperliquid stablecoin
Bernstein analysts reaffirmed their $230 price target for Circle's stock (ticker CRCL) on Monday as they are confident the USDC stablecoin issuer will manage to sustain growth regardless of impending competition.
The analysts specifically addressed concerns related to a debate regarding Hyperliquid and whether an eventual Hyperliquid stablecoin could significantly impact USDC. In recent days, Hyperliquid announced an auction for stablecoin tickers for its Layer 1 blockchain HyperEVM. The idea put forth by some on social media is that Hyperliquid introducing its own stablecoin could cause USDC activity to shrink on Hyperliquid's popular futures exchange.
Nearly 7.5% of the total USDC supply "is used as collateral on the Hyperliquid perpetual futures platform," according to analysts at Bernstein.
Stablecoin issuers Paxos, Frax Finance, and Agora, along with a new team dubbed Native Markets, have shown interest in issuing Hyperliquid's forthcoming USDH stablecoin, which was announced Friday in a Discord post.
Bernstein analysts admit that the introduction of a Hyperliquid stablecoin and others should create a more competitive environment, but the impact on Circle will not be immediate.
"Bootstrapping liquidity for new stablecoins is non-trivial and especially for crypto capital market products such as futures, where position sizing and execution efficacy matters," the analysts wrote in the note. "Hyperliquid might choose to work with more stablecoin partners (including Paxos) to build more resiliency on its platform, but building liquidity on its futures product is a gradual process."
As some expect the stablecoin market to grow into the trillions of dollars, several firms, including the Trump-backed World Liberty Financial, are attempting to create more demand for their USD-pegged token. Others, like banking giant Bank of America, are poised to create their own stablecoin.
On Sunday, Circle co-founder and CEO Jeremy Allaire — possibly motivated by the notion that Hyperliquid launching a stablecoin could harm USDC — reposted a statement from July announcing USDC would be deploying on HyperEVM.
"Don't Believe the Hype," Allaire posted to X over the weekend. "We are coming to the HYPE ecosystem in a big way. We intend to be a major player and contributor to the ecosystem."
Circle's continued growth prospects
Bernstein analysts also voiced their confidence in Circle's growth potential based on the potential for additional tailwinds.
"As rate cut cycle commences, we expect the digital asset cycle to turn risk-on, driving further USDC demand (also demand for USDC yield on-chain). Further, stablecoin demand from payments and financial services integration is still in its early days, as Circle continues to grow its USDC financial ecosystem," they said.
In their Monday report, Bernstein's analysts also said that "relative to Tether, USDC has gained market share (30% today vs. 28% in Q2)." Tether's USDT stablecoin is the world's largest by supply.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.