Shares of Circle ( CRCL ) rose 4% on Wednesday after Japanese financial giant Mizuho upgraded the stock to neutral, pointing to an increase in activity on crypto-prediction platform Polymarket as a new growth driver for Circle’s stablecoin, USDC.
“When we initiated CRCL with an Underperform … Our concern at the time was that poor USDC distribution, falling interest rates and stiff competition from Tether’s USDT would weigh on the stock,” wrote analyst Dan Dolev. “As all Polymarket bets are settled in USDC, we now see USDC on Polymarket as a looming catalyst.”
Polymarket’s 2026 trading volumes are off to a fast start, according to the note, with annual volumes looming around $50 billion, three times the amount in 2025. Mizuho estimates that the current run-rate could drive ~25% potential upside to USDC market cap or more.
As a result, Dolev raised his forecasts for the average USDC in circulation for 2026 and 27 by ~7% and ~21%, respectively, which in turn increases his revenue estimates by ~6% and ~21% for those years.
He also pointed to broader trends behind the rise of event-driven crypto trading. “After the 2024 US election (which sparked the market prediction frenzy), these platforms diversified into sports, financials and pop culture betting, which attracted a larger user base and volume.”
Polymarket, noted Dolev, is particularly well positioned. “Polymarket is pulling a large share of non-crypto native users into crypto via event trading, driving an incremental demand for USDC from outside the usual DeFi crowd.” He said the prediction platform is likely to expand further in the next two years, adding billions in incremental USDC market capitalization.
Still, Dolev stopped short of issuing a bullish call, and his price target of $77 suggests modest upside from current levels just above $70. “While Polymarket is certainly a potential boost for USDC,” he said, “this is somewhat offset by other negative factors including: Looming interest rate cuts, rising distribution costs and intense competition from both stablecoin players such as Tether and established financial institutions launching their own stablecoins.”
Circle’s 4% gain on Wednesday comes as most crypto-related names coincide with continued sluggishness in the price of bitcoin, which remains firmly below the $90,000 level.
