Circle's stock has risen eightfold in two weeks. Does it make sense to buy them?

Shares of Circle, the issuer of USDC, the second most capitalized steiblcoin, have risen nearly eightfold since the company's IPO in early June. Investors have been buying up the newcomer's securities on the exchange in anticipation of the passage of a bill that could lead to broader institutional acceptance of stablecoins - digital assets pegged to the dollar. On Friday, a Seaport analyst became the first to give Circle's securities a "buy" rating.

Since  going public June 5, Circle quotations have grown almost eight times: from the starting price of $31 per paper to $240.2 at the close of June 20. They ended Friday's trading up more than 20%, and added more than 30% on Wednesday. On Thursday the markets in the USA were closed on the occasion of the national holiday.

Circle's quotes were boosted this week by the Senate's approval of the Senate's legislation GENIUS bill to regulate stablecoins - it establishes rules under which U.S. companies will be able to issue and use dollar-denominated stablecoins for payments. The document is now being considered in the House of Representatives.

Seaport analyst Jeff Cantwell initiated coverage on Circle stock on Friday, giving it an initial "buy" rating and a target price of $235 per share, MarketWatch reports. However, after the trading session on Friday, Cantwell's target was 2% below current quotes. 

If the GENIUS bill passes, Cantwell projects the entire industry to experience significant growth. According to him, the market capitalization of stablecoins could double in the next 18 months to $500 billion, and in the long term - to reach $2 trillion, and Circle will be the beneficiary. According to data cited by Bloomberg, the USDC token issued by Circle held about 29% of the market at the end of March. 

"We expect Circle's revenue to grow at 25-30% per year, with the ability to build operational efficiencies as it scales," the Seaport analyst said in a note cited by MarketWatch. In 2026, he estimates the company's revenue will reach $3.5 billion.

The analyst says Circle has huge potential. He called it one of the leading "crypto disruptors" - companies that are radically changing the market with the help of new technologies. According to Cantwell, Circle's main growth drivers will be the development of its own Circle Payments Network (CPN), which allows financial institutions to conduct cross-border settlements in real time. The Seaport analyst believes that this system is capable of becoming a competitor to such payment giants as Visa and Mastercard. In addition, online retailer Shopify said in June that it would introduce USDC payments for its customers and merchants worldwide. As a result, Cantwell predicts, Circle stock will outperform other fintech companies.

So far, only two analysts have assigned ratings to USDC issuer securities: they now have one "buy" and one "hold" recommendation, notes Bloomberg.