Shares of Circle (CRCL) rose 4% Wednesday after Japanese finance giant Mizuho upgraded the stock to neutral, pointing to a surge in activity on crypto prediction platform Polymarket as a new driver of growth for Circle’s stablecoin, USDC.

“When we initiated CRCL with an Underperform ... Our worry then was that meager USDC distribution, declining interest rates and fierce competition from Tether's USDT would weigh on the stock,” analyst Dan Dolev wrote. “Since all Polymarket bets are settled in USDC, we now see USDC on Polymarket as a looming catalyst."

Polymarket’s 2026 trading volumes are off to a fast start, according to the note, with annualized volumes of looming around $50 billion, three times the amount in 2025. Mizuho estimates that the current run-rate could drive ~25% potential upside to USDC market cap or more.

As a result, Dolev raised his forecasts for the average USDC in circulation for 2026 and 27 by ~7% and ~21%, respectively, which in turn increases his revenue estimates by ~6% and ~21% for those years.

He also pointed to broader trends behind the rise of event-driven crypto trading. “After the 2024 U.S. election (which sparked the prediction market craze), these platforms diversified into sports, economics, and pop culture bets, which attracted a larger user base and volume.”

Polymarket, Dolev noted, is particularly well-positioned. “Polymarket draws a large share of non-crypto-native users into crypto via event trading, which drives incremental demand for USDC from outside the usual DeFi audience.” He said that the prediction platform will likely expand further in the next two years which would add billions in incremental USDC market cap.

Still, Dolev stopped short of issuing a bullish call, and his $77 price target suggests just modest upside from the current level just above $70. “Although Polymarket is certainly a potential boost to USDC," he said, "this is somewhat offset by other adverse drivers including: Looming rate cuts, rising cost of distribution and intense competition from both stablecoin players like Tether USDT$0.9988 and incumbent financial institutions launching their own stablecoins.”

Circle's 4% advance on Wednesday comes as most crypto-related names are declining alongside continued sluggishness in the price of bitcoin, which remains stuck below the $90,000 level.