Bernstein reiterated its outperform rating on Circle, undeterred by Hyperliquid's entry into the stablecoin challenge.

Bernstein analysts reiterated their price target of $230 for Circle's stock (ticker: CRCL) and expressed confidence in its continued growth. Despite the increasing competition faced by the stablecoin issuer, particularly from Hyperliquid, which plans to launch its own stablecoin, Bernstein still believes that the intensifying competition will not significantly shake USDC's dominance in the short term.

Bernstein is optimistic about the market position and prospects of USDC

Bernstein's analysts are optimistic about Circle's future, largely due to the rising demand for stablecoins. USDC has proven to be a key player in the crypto ecosystem, especially in terms of financial services and payment integration. Analysts emphasized that USDC's market share has risen from 28% in the second quarter of 2025 to 30%. This growth has been achieved amid competition from other issuers, such as the world's largest stablecoin USDT.

Bernstein attributed part of the rise to Circle's expanding financial ecosystem and the increasing use of USDC in on-chain yield generation. Additionally, with the potential rate cuts in the U.S., analysts expect a "risk-on" environment, which will stimulate demand for USDC and other digital assets.

As global financial services increasingly use stablecoins for cross-border payments and digital finance, Circle is expected to capture a larger share of this rapidly growing market.

Hyperliquid stablecoin and its potential impact

The launch of Hyperliquid's USDH stablecoin has raised questions about the future prospects of USDC, especially in decentralized finance (DeFi) ecosystems like Hyperliquid. Although Bernstein acknowledges that the emergence of Hyperliquid and other stablecoin competitors will create a more vibrant environment, they point out that establishing liquidity for a new stablecoin is a difficult and time-consuming process. This is especially pronounced in markets where execution reliability and trading volume are crucial.

Bernstein emphasized that even if Hyperliquid collaborates with stablecoin issuers like Paxos to enhance its platform, the process of increasing liquidity will still take time. Therefore, they believe that the activity of USDC on Hyperliquid will slowly decrease.

Circle maintains rise in the competitive landscape

Despite increasing competition, Circle maintains a strong market position. Analysts point out that the rising supply of USDC has exceeded Bernstein's forecast for 2025. Currently, the supply of USDC is at $72.5 billion, which is 25% higher than the broker's estimate, and is expected to reach $74 billion by the end of the year. This growth is attributed to the increasing demand for USDC across various sectors, from payments to decentralized finance applications.

Jeremy Allaire, the CEO of Circle, expressed confidence in the continued rise of USDC and noted that the company is expanding its influence in emerging ecosystems such as HyperEVM. In a recent post, he assured the community: "Don't believe the hype. We are entering the HYPE ecosystem in significant ways."

Given these developments, Bernstein maintained its "outperform" rating on Circle stock with a target price of $230. At the time of the report's release, Circle's stock price was approximately $116, up 1.2%. Analysts still believe that Circle's diversified ecosystem, combined with the growing demand for USDC, will provide the company with ongoing growth and stability. Despite facing competition from new entrants like Hyperliquid, Bernstein analysts remain optimistic about the long-term prospects for Circle and USDC.

Conclusion

Bernstein's report provides a strong boost for Circle and USDC in the increasingly fierce competition. Despite the emergence of new competitors like Hyperliquid, the core point of the report is that, with its established liquidity and trust base, USDC's market dominance is unlikely to be shaken in the short term. This indicates that in the rapidly developing stablecoin market, first-mover advantage and a strong ecosystem remain key factors in determining success. As global demand for digital finance continues to grow, Circle, with its solid position and growth momentum, still has a positive long-term development outlook.