NEW YORK, March 10, 2026, 12:24 (EDT)
Shares of Circle Internet Group climbed roughly 6.2% Tuesday, changing hands at $118.75 by midday in the U.S. The move came after Monday’s annual report showed just how much the USDC issuer counts on reserve income. Circle also submitted an S-8 for employee stock plans that day.
Timing is key here: Circle’s sharp rally following its earnings has shifted attention toward the company’s business mix, not just how fast it’s growing. The 10-K spells it out—reserve income from stablecoin reserves accounted for 96% of revenue from ongoing operations in 2025, leaving Circle’s fortunes hitched to both interest rates and token expansion. Stablecoins, meant to maintain parity with fiat currencies like the U.S. dollar, remain central.
Circle flagged in the filing that its results are highly sensitive to interest rate shifts. Reserve income comes from putting the cash and short-term U.S. Treasuries behind USDC to work, but the company cautioned: if rates dip, those returns will shrink—even if more people use USDC.
The annual report dropped less than two weeks after Circle posted robust quarterly numbers. On Feb. 25, the company said fourth-quarter revenue and reserve income jumped 77% to $770 million, with reserve income alone up 69% at $733 million. USDC in circulation finished the year at $75.3 billion. According to Reuters, the stock surged close to 30% that day.
USDC’s growth isn’t slowing down, and the pace is handily outstripping any effects from rates, Seaport Research Partners analyst Jeff Cantwell said to Reuters after the numbers dropped. Chief Executive Jeremy Allaire, also in comments to Reuters, called the idea of lower rates “welcome” if it means faster movement of money and stronger adoption. Reuters
Circle’s filing gave a glimpse of just how much the company still relies on Coinbase. The two have a collaboration agreement dating back to August 2023: Circle pays Coinbase, based mostly on net reserve income from USDC, and logs these outflows as distribution costs.
The competitive landscape is getting tougher. Circle notes it’s up against “intense and increasing competition” not just from offshore rival Tether, but also from other U.S. stablecoin outfits, banks, and payment firms that might jump in once the regulatory picture sharpens. SEC
The company wants to shift the focus beyond just reserve yield. Last week, Allaire described the quarter as “another step forward” for Circle’s broader ambitions in payments and blockchain infrastructure. He highlighted expanding activity in the Circle Payments Network and ongoing work to get the Arc mainnet off the ground this year. Circle
The S-8 filing from Monday looked routine, but it’s relevant for anyone watching Circle’s share count. The company registered 14.54 million new Class A shares tied to its 2025 omnibus incentive and employee stock purchase plans, reflecting automatic bumps that kicked in on Jan. 1.
The 10-K laid out the potential pitfalls as well. Circle cautioned that in stressful periods, a surge of redemptions—or even a run—could hit the company hard. If nearly every USDC holder wanted to cash out at the same time, it warned, delays might follow and reserves could fall short of covering every withdrawal request. Lower interest rates, Circle added, would also eat into reserve returns.
Circle’s June 2025 debut priced shares at $31, pulling in $1.05 billion from an upsized IPO. Reuters called it one of the largest crypto flotations since Coinbase hit the market back in 2021. The stock’s trading well above the IPO price as of Tuesday, but fresh filings indicate the company’s new offerings still haven’t supplanted its core reserve-yield business.
