Mizuho Upgrades Circle Shares Outlook Citing Polymarket's Use of USDC for Settlement

Mizuho Securities has upgraded Circle Internet Group (NYSE: CRCL) to a 'neutral' rating and raised its price target to $77. This follows earlier concerns over the stablecoin issuer's performance, including a previous price target reduction in November 2025. Analysts Dan Dolev and Alexander Jenkins cited Polymarket's growth and its exclusive use of Circle's USDC for bet settlements as key drivers of Circle's potential.

The analysts argue that Polymarket's growth could translate into increased USDC adoption, particularly as the platform attracts a broader audience beyond the crypto-native community. This includes event-based trading, which introduces non-crypto users to the ecosystem. Mizuho noted that USDC's market capitalization has grown from $30 billion in early 2024 to over $75 billion by the end of 2025, with Polymarket contributing to this expansion.

Circle's shares rose over 3.5% on the news, trading at around $72.50 on January 28. The stock has seen significant volatility since its public listing in June 2025, with a peak near $300 in July 2025 followed by a sharp decline.

Why Did This Happen?

Mizuho's analysts project that the recent surge in USDC demand via Polymarket will continue to fuel growth in the coming year. The prediction platform processes over $50 billion in annualized trades, and Mizuho believes this trend could drive a 25% increase in USDC's market cap.

Analysts also emphasized the importance of U.S. regulatory developments. Polymarket, which faced enforcement action in 2022, has recently reopened access to a limited set of participants. This regulatory clarity has been a positive factor for USDC adoption, according to Mizuho.

How Did Markets Respond?

The market responded favorably to the upgrade. Circle's stock closed at $72.50 on January 28, up 3.5% from the previous day's close. The stock remains below its 52-week high of $298.99 but is trading above Mizuho's updated price target.

Circle's strong earnings performance has also supported investor optimism. In the third quarter of 2025, the company reported an adjusted EBITDA of $166 million and a revenue of $740 million, both showing significant year-over-year growth. However, the stock fell 7.42% in pre-market trading after the earnings report, due to concerns over future guidance and broader market conditions.

What Are Analysts Watching Next?

Mizuho raised its price target for Circle shares to $77 but noted that its forecast for USDC supply remains below consensus expectations. The firm is closely monitoring the platform's expansion and the impact of regulatory developments on its growth potential.

Analysts are also watching the competition between USDC and Tether's USDT. While USDT remains the largest stablecoin by market cap, Mizuho believes USDC's institutional and regulatory advantages could help it close the gap.

In addition, Circle's recent strategic partnership with Intuit is expected to expand the use cases for USDC across financial platforms such as TurboTax and QuickBooks. This collaboration could further drive adoption among traditional finance users, according to Mizuho.

Circle is also preparing for potential challenges from stablecoins. Standard Chartered recently estimated that U.S. banks could lose up to $500 billion in deposits to stablecoins by 2028, as digital assets gain traction in the financial system. Circle's ability to navigate this shift and maintain strong reserves will be a key factor for its future success.

The company's fourth-quarter earnings report is scheduled for February 25, 2026. This will be a critical update for investors, as it will provide more insight into Circle's financial health and growth trajectory in a competitive market.