Shares of stablecoin issuer Circle (CRCL) have surged more than 100% over the past month, turning what many investors once viewed as one of the most conservative corners of crypto into one of the market’s hottest trades.

The rally gained momentum Monday, with the stock climbing another 8% to $124.37, outpacing other crypto-linked equities. Meanwhile, Michael Saylor's Strategy (MSTR) and crypto exchange Coinbase (COIN) are up 23% and 8.5% in a month, respectively.

The move also coincided with recent bullish analyst calls. Clear Street upgraded Circle to Buy from Hold and raised its price target to $136 from $92, while Mizuho also raised its price to $120 from $100, pointing to improving fundamentals around the company’s USDC stablecoin.

Even Circle's biggest bear, Compass Point’s Ed Engel, upgraded the company's rating to Neutral from Sell in January. Currently, Seaport Global's analyst is the most bullish on the stock, with a $280 price target, according to FactSet data.

Hottest crypto trade

The surge reflects a growing view among investors that Circle sits at the center of several powerful trends shaping the digital asset industry, from tokenized financial products to AI-driven payments.

Macro conditions may also be playing a role. Escalating tensions in Iran and rising oil prices have fueled concerns that inflation could remain sticky, potentially delaying Federal Reserve rate cuts. That scenario could benefit Circle because the company earns a large share of its revenue from interest on reserves backing USDC, its dollar-pegged stablecoin. Higher interest rates typically translate into stronger earnings for stablecoin issuers.

Circle’s core product is USDC, a digital token designed to maintain a value of $1. The stablecoin runs on public blockchains and allows users to move dollars globally, settle trades and post collateral without relying on traditional banking rails.

Unlike many crypto assets, demand for stablecoins often grows even when markets decline. Since October 2025, the total crypto market capitalization has fallen roughly 44%, while USDC’s market cap has remained relatively stable, according to Clear Street. The difference reflects USDC’s role as a payment infrastructure rather than a speculative asset.

Another driver is the rapid expansion of tokenized financial assets, which bring instruments like U.S. Treasuries and credit funds onto blockchain networks. Many of these products use USDC to process subscriptions, redemptions and payments. BlackRock’s tokenized Treasury fund BUIDL, for example, has grown to more than $2 billion in assets since launching in 2024.

Clear Street estimates the market for tokenized assets has expanded from about $1.5 billion in early 2023 to roughly $26.5 billion today, a trend closely tied to rising demand for stablecoins.

“The scale of this opportunity is significant,” Clear Street's Lau said.

Other emerging use cases could add further momentum. Prediction markets such as Polymarket processed more than $22 billion in trading volume in 2025, largely using USDC as the settlement currency.

Analysts also point to AI-driven commerce as a longer-term catalyst. Autonomous software agents increasingly require programmable payment tools to purchase data, services or computing power. Early data suggests stablecoins already dominate these transactions, with roughly 98% of AI-agent payments settled in USDC.

Regulation could provide another boost. Analysts say the chances of U.S. crypto legislation advancing have improved after President Donald Trump voiced support for the proposed CLARITY Act, which would clarify oversight of digital assets and could encourage greater institutional participation.

For now, the result is a rare market moment: a company built around one of crypto’s most stable assets has become one of its fastest-rising stocks.

"We believe the Street has under-estimated the impact of tokenization, prediction markets, war and AI on USDC," Lau noted.

Read more: Circle overtakes BlackRock in tokenized Treasuries as market hits record $11 billion