Bernstein Maintains $190 CRCL Target as $222M ARC Presale Offsets Rate Pressure

Bernstein analysts maintained an Outperform rating on Circle Internet Group (CRCL) with a $190 price target on Tuesday, citing a $222 million ARC token presale and resilient USDC supply growth as offsets to declining interest income, according to The Block. Circle shares closed at $131.76 on Monday, implying approximately 44% upside from the Bernstein price target.

Q1 Financial Performance and Reserve Income Pressure

Analysts led by Gautam Chhugani noted that Circle’s reserve income declined 11% quarter-on-quarter in Q1 due to weaker interest rates, while adjusted EBITDA of $151 million came in approximately 10% above consensus estimates. Q1 revenue reached $694 million, missing estimates by roughly 4%, driven primarily by lower reserve income. However, the analysts highlighted that adjusted EBITDA strength and stable cost discipline supported near-term financial visibility.

ARC Token Presale and Revenue Recognition

The $222 million ARC token presale was structured at a $3 billion fully diluted network value, providing what Bernstein described as a near-term buffer against interest rate sensitivity. The presale proceeds will be recognized as other revenue upon token delivery and are excluded from Circle’s current fiscal year 2026 guidance.

USDC Supply Growth and On-Platform Expansion

USTC supply reached $77 billion in the first quarter, representing 28% year-over-year growth and 2% growth from the previous quarter. Bernstein noted that Circle’s on-platform USDC balances climbed to $13.7 billion, representing 18% of total supply, even as the broader crypto market declined approximately 40% since October 2025.

[Image: USDC Supply by Blockchain chart]

Payments Infrastructure and Strategic Partnerships

Circle’s payments infrastructure continued to scale, with Circle Payments Network annualized transaction volume approaching $10 billion and 136 financial institutions onboarded as of May 7, according to the analysts’ note. Notable partnerships include collaborations with Meta, DoorDash, and Kyriba. The analysts emphasized that Circle’s distribution footprint and payments capabilities position the company to capture incremental blockchain fee income.

Arc Blockchain Development and AI Payments

Bernstein highlighted the impending mainnet launch of Arc, Circle’s Layer 1 blockchain, which processed over 244 million cumulative transactions and supported 1.6 million unique wallets during its testnet phase. The analysts noted that Arc’s “agentic” stack, specifically the x402 open standard for machine-to-machine micropayments, positions USDC to capture payments for AI-driven software agents. Bernstein noted that USDC currently accounts for over 99% of all x402-based agentic payments settled globally.

Forward Guidance and Rating Rationale

Circle’s fiscal year 2026 guidance remains unchanged, forecasting a 40% compound annual growth rate for USDC supply and non-float revenue between $150 million and $170 million. Bernstein reiterated its Outperform rating, maintaining that growth in raw USDC supply and incremental blockchain fee income offset the near-term sensitivity to interest rate declines.

Disclosure: Gautam Chhugani maintains long positions in various cryptocurrencies. Certain affiliates of Bernstein have received compensation for investment banking and non-investment banking services from Circle within the past 12 months.