Circle (CRCL) shares jumped a record 35% on Wednesday after the issuer of the second-largest stablecoin said the amount of USDC in circulation grew 72% last year and posted fourth-quarter earnings that beat analyst estimates.

Total revenue, most of which is income from reserves backing the token, rose 77% from the year-earlier quarter to $770 million, the company said. Net income of $133.4 million, or 43 cents a share, rose more than 40-fold. Analysts had forecast 16 cents a share, according to FactSet data.

Circle's earnings are a reminder of the strength of the stablecoin sector even as the wider cryptocurrency market has been depressed for months. In addition to their use in cryptocurrency markets, the tokens, whose value is pegged against a real-world asset such as the dollar, are finding increasing application in international payment systems.

The company said its Circle Payments Network (CPN) expanded with the enrollment of 55 financial institutions and another 74 going through the eligibility process as of Feb. 20.

Circle's USDC is the second-largest stablecoin. Its market capitalization of nearly $75 billion makes it a distant second to Tether's USDT, with $183 billion, but a long way ahead of any of its other competitors.

"The stablecoin market is, despite the efforts of main other firms to enter and complete, a market of two major issuers," Circle founder and CEO Jeremy Allaire said on an earnings calls on Wednesday. "This reflects the very durable networks effects that we maintain that are significant barriers to entry and adoption.

While USDT remains larger than every other stablecoin in existence — including USDC — combined, its market share is declining. Its share currently sits slightly below 60%, having fallen 0.8% this month following a 1% drop in January.

CRCL shares rose to $83.14, adding a record 35.47%.

A significant tailwind to Circle's growth throughout 2025 has been the broader institutional adoption of stablecoins buoyed by the introduction of the GENIUS Act in the U.S. last July, which outlined the first formal regulatory framework for the sector.

Alaire highlighted the ramifications GENIUS could have on treatment of stablecoins in other markets.

"Banks, payment companies, tech firms around the world are leaning in and wanting to weave stablecoins into their product strategies," he said on the earnings call. "International regulators are seeing they need to acknowledge GENIUS-compliant stablecoins as the 'good' stablecoins that could be allowed in their markets."

Long outperform-rated Circle

Investment bank William Blair said investors should be long outperform-rated Circle (CRCL), calling it one of a short list of high-quality crypto infrastructure plays in public markets alongside Coinbase (COIN).

Analysts Andrew Jeffrey and Adib Choudhury said Circle’s fourth-quarter results topped both its own estimates and Wall Street expectations, with revenue less distribution costs (RLDC) and adjusted EBITDA beating its model by 10% and 12%, respectively.

Investors are likely to focus on Circle’s 40.1% fourth-quarter RLDC margin, which came in 240 basis points above its estimate and 370 basis points ahead of the Street, the analysts said in the Wednesday report.

The report attributed the upside to a higher mix of on-platform USDC, with tokens held directly on Circle’s platform now accounting for nearly 18% of average USDC in circulation, as well as stronger-than-expected subscription and transaction revenue.

The timing of broader USDC commercialization remains uncertain, the analysts said.

CORRECT (Feb. 25, 14:12 UTC): Corrects EPS estimate to 16 cents throughout. An earlier version of the story had it as 35 cents in some places. Rewrites first paragraph to add reason for increase, adds revenue in second, wider context of stablecoin sector in third and CEO quote in fourth.

UPDATE (Feb. 25, 14:46 UTC): Updates shares price following start of U.S. trading.

UPDATE (FEB. 25, 15:15 UTC): Replaces Allaire quote from announcement with one from earnings call; adds paragraphs on CPN and USDT and section on William Blair comments.

UPDATE (Feb. 25, 16:54 UTC): Adds quote from Allaire on regulatory backdrop in 11th paragraph.

UPDATE (Feb. 26, 09:56 UTC): Updates with closing share price, record move.