To The Moon

1. Q1 2026 Preview: USDC Circulation & Market Share Trends 📊

Tiger Research Team maintains HOLD rating but lifts Price Target to $100 as $Circle Internet Corp.(CRCL)$ navigates a shifting landscape of stabilizing market share, evolving regulation, and mixed macro signals.

Here is the team's comprehensive analysis of the data, the macro outlook, and our valuation model. 👇

The Resilience:

According to CoinMarketCap, average USDC circulation reached $75.3B in 1Q26, down a modest 1.3% q/q from $76.3B in 4Q25. The quarter saw notable intraperiod volatility—circulation peaked at approximately $79.6B in March before moderating to $77.2B by quarter-end. Entering 2Q26, momentum has already rebounded, with circulation climbing back to $78.3B as of April.

The Context:

The broader stablecoin market cooled alongside crypto asset prices. Total fiat-backed stablecoin supply declined modestly to $268.8B as of March 31, down 0.4% q/q from $269.9B at year-end—a marked deceleration following ~47% growth in 2025. Tiger Research Team attributes this slowdown primarily to the crypto market selloff, during which BTC retraced to ~$60,000 over the quarter.

The Competitive Shift:

Within this softer backdrop, USDC is gaining ground against its main rival.

• USDC Market Share: Rebounded from 27.9% ➝ 28.7%.

• USDT Market Share: Edged down from 69.3% ➝ 68.5%.

2. The Financials: Yield Compression Weighs on Reserve Income 💸

On the yield side, the macro environment continues to shift. Average SOFR (Secured Overnight Financing Rate) declined to 3.66% in 1Q, down an additional 33 bps q/q from 3.99% in 4Q25.

Based on this, Tiger Research Team models $Circle Internet Corp.(CRCL)$ ‘s 1Q26 performance as follows:

• Reserve Return Rate: Estimated at 3.53%, implying reserve income of $664M (down 9% q/q).

• Non-Reserve Revenue: Expected to remain broadly flat q/q at $36.8M

3. 2026 Outlook: Fewer Rate Cuts & Mixed Macro Implications 🔮

Looking ahead, Tiger Research Team is adjusting its model for an evolving macro landscape.

The Macro View: The market is now pricing in fewer than one Fed rate cut in 2026, with higher oil prices reinforcing inflation concerns. While higher rates are supportive of reserve income, tighter financial conditions and elevated geopolitical risks could weigh on crypto asset prices, which in turn may dampen stablecoin demand. Tiger Research Team notes the net impact is not unequivocally positive—BTC remains predominantly treated as a risk asset despite its "digital gold" narrative.

The Revisions:

Due to expected near-term softness in crypto asset prices:

• 1Q Revenue: Decreased by 1%.

• Non-GAAP EBITDA: Largely unchanged.

• 2026 Revenue: Increased by 4%.

• 2026 Non-GAAP EBITDA: Increased by 4%.

4. Valuation & Risks 🔢

Valuation Methodology (SOTP): The new target of $100 (raised from $85) is based on a Sum-of-the-Parts approach:

• Reserve Income Segment: Valued at $19.2B (based on 27x 2027E EBITDA of $710M).

• Emerging Businesses: (Payments, Infra, Tokenized products) Valued at $6.0B.

• Total Enterprise Value: $25.2B, or $100 per share.

5. Key Risks to Watch 📝

• Valuation: Circle enjoys a premium valuation thanks to its unique market position; much upside is expected in future optionality;

• Macro & Crypto Dependence: Reserve income sensitive to rate cuts and bear markets

• Emerging Competition: Big tech, banks, and non-crypto issuers could challenge $Circle Internet Corp.(CRCL)$ in payments and financial rails

• Execution: Success in CPN, developer tools, and tokenization is essential to support current valuation

📝 Summary

• Tiger Research remains constructive on Circle’s long-term strategic optionality and resilient earnings.

• However, the immediate outlook is clouded by the evolving rate cycle and the risk of policy-driven lower rates, which could impact reserve income.

• Key monitoring points for 2026 include the Fed’s pace of rate cuts and whether Circle can halt market share loss against Tether.

🐯 Questions for Tigers

• Market Share Momentum: USDC has rebounded from 27.9% to 28.7% in Q1 2026. Do you think Circle can sustain these gains against USDT through the remainder of 2026, or was this a temporary blip?

• Rate Cut Paradox: The market is now pricing in fewer than one Fed rate cut in 2026. With higher rates supporting reserve income but tighter financial conditions potentially dampening stablecoin demand, which side of this equation do you think wins out for CRCL?

• Fair Value or Fully Priced? With the price target raised to $100 and the stock trading at ~35x 2027E EBITDA, do you view this as a signal to take profits or to stay invested for the long haul?

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