Circle's record Q3 profits signal major stablecoin growth and Arc blockchain token plans

Circle's Stellar Q3 Performance and Arc Blockchain Token Ambitions

Circle, the financial technology company best known for its stablecoin USD Coin (USDC), has demonstrated truly remarkable financial growth in the third quarter. The company reported an astonishing surge in USDC's turnover, reaching $73.7 billion, a massive 108% leap year-over-year. This impressive expansion was complemented by a robust net profit of $214 million, soaring by an extraordinary 202% compared to the previous year. These figures paint a picture of a company not just growing, but accelerating at an impressive pace.

Beyond its core stablecoin operations, Circle also signaled significant future developments. The company revealed its exploration into the possibility of launching a native token for its burgeoning blockchain, Arc. This move suggests a strategic push towards greater ecosystem integration and control, potentially unlocking new functionalities and revenue streams.

Dominant Financials and Expanding Reach

The third quarter was a period of broad financial strength for Circle. Total revenue climbed to $740 million, representing a healthy 66% increase on an annual basis. Reserve profits saw a substantial 60% boost, reaching $711 million, largely fueled by an impressive 97% rise in the average USDC turnover, which averaged $67.8 billion. Adjusted EBITDA also showcased strong performance, hitting $166 million (+78%), with the adjusted margin climbing to a very healthy 57%.

Looking ahead, Circle has confidently raised its forecast for "other income" for 2025, projecting it to be between $90 million and $100 million, a notable increase from the previous $75-85 million estimate. The growing prominence of USDC is further underscored by its increased share on the Circle platform, now accounting for 14% of the total supply, while its overall market share solidified at 29%.

The Arc Blockchain and Future Tokenization

A key development highlighted is the ongoing progress with Arc, Circle's proprietary Layer 1 blockchain designed with programmable finance at its core. The successful launch of its public testnet in October attracted over 100 participants from both traditional finance and the cryptocurrency sectors, signaling strong industry interest and early adoption. This momentum has led Circle to explicitly confirm its consideration of a dedicated Arc token. Furthermore, the company's earlier announcement in September regarding the exploration of reverse transactions generated significant buzz and discussion within the crypto community, demonstrating its proactive approach to innovation.

The expansion extends to Circle's Payments Network, which is steadily growing its footprint, now operating in eight countries. With 29 financial institutions already connected and over 500 more in the integration pipeline, the network is poised for significant future transaction volumes.

Market Reaction and Investment Endorsements

Despite the overwhelmingly positive financial results and strategic announcements, Circle's stock experienced a notable dip, falling 12.2% to $86.3. This market reaction, however, presented an opportune moment for significant investment. Notably, Ark Invest, led by Cathie Wood, made a substantial purchase, acquiring a combined 302,813 shares across its various ETFs (ARKK, ARKW, ARKF) for a total of $30.5 million. This bold move underscores a strong conviction in Circle's long-term potential.

Independent analysis further solidifies this optimistic outlook. William Blair's report positions Circle as a "key bet on stablecoins" for investors targeting the massive $20 trillion global payments market. They posit that USDC could eventually supersede traditional fiat as the settlement infrastructure for digital commerce. This narrative is bolstered by Bernstein's projections, which anticipate a threefold increase in USDC supply by the end of 2027. Bernstein reiterates an "outperform" rating and a $230 price target, citing sustained USDC growth, improving margins, and the strategic development of Arc. They dismiss concerns about interest rate fluctuations impacting the business, forecasting that even with a decline in key rates to 2% by 2027, the current stock price implies an EV/EBITDA multiple of 21-29x. Bernstein estimates USDC could capture a third of the global stablecoin market by 2027, highlighting Circle's regulatory compliance and network offerings as distinct competitive advantages.