Mizuho Securities has reversed its previous stance on Circle Internet Group (NYSE: CRCL), upgrading the company's shares to a "neutral" rating on Wednesday. The upgrade is primarily driven by the growing popularity of the crypto prediction platform Polymarket, which exclusively uses Circle's USDC stablecoin for settling all bets.
Analysts Dan Dolev and Alexander Jenkins highlighted the direct link between Polymarket's expansion and USDC's growth. "For Polymarket, all bets are settled in USDC, meaning Polymarket's growth will directly fuel USDC growth," they wrote. They anticipate continued momentum for prediction markets in 2026, which they believe will translate into USDC market cap growth and incremental revenue for Circle.
This marks a significant shift from Mizuho's position in November, when the firm lowered its price target for Circle shares to $70, partly due to expectations of disappointing USDC adoption. The new price target is now $77.
Key to the bullish thesis is Polymarket's ability to attract non-crypto-native users. Mizuho noted, "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." The firm pointed to USDC's market capitalization growth from roughly $30 billion in early 2024 to over $60 billion in March 2025, and approximately $75 billion by the end of 2025, with Polymarket cited as a contributor.
Looking forward, Mizuho expects Polymarket's continued expansion, especially with restored U.S. access, to add billions to USDC's market cap over the next 1-2 years. Polymarket's 2026 trading volumes are off to a fast start, with annualized volumes looming around $50 billion—three times the amount in 2025. Mizuho estimates this run-rate could drive approximately 25% potential upside to USDC's market cap.
As a result, analyst Dan Dolev raised his forecasts for the average USDC in circulation for 2026 and 2027 by about 7% and 21%, respectively, increasing revenue estimates by 6% and 21% for those years.
Despite the upgrade, Dolev maintained a cautious outlook, citing offsetting adverse drivers including looming interest rate cuts, rising distribution costs, and intense competition from Tether's USDT and incumbent financial institutions launching their own stablecoins.
Following the upgrade, Circle shares rose over 3.5% on Wednesday, trading around $72.50. This contrasts with the broader decline in most crypto-related stocks amid continued sluggishness in Bitcoin's price.
