Wells Fargo Says Circle Is Crypto’s Underappreciated Winner

Wells Fargo equity research this week told clients that Circle Internet Group is the most underappreciated winner of a crypto sector that has stopped pretending to be a casino. The bank framed the USDC issuer as financial plumbing for the dollar, not a speculative ticker, and kept its Overweight rating heading into Circle’s first-quarter 2026 earnings on May 11.

The note landed days after CRCL stock jumped roughly 20% on May 4 to close near $119.53, lifted by a Senate compromise on the CLARITY Act that preserves stablecoin reward programs. Circle is now up about 49% year to date, outpacing every major US index and most of the listed crypto group.

That’s the trade Wells Fargo’s sober framing rests on. Bitcoin’s price swings still grab the headlines. But the sector’s steadiest revenue stream now comes from the dollar-pegged tokens passing between exchanges, fintechs and corporate treasury desks. Circle issues the second-largest of those tokens.

What Wells Fargo Actually Said, And What It Is Hedging

Wells Fargo kept its Overweight call on CRCL at a $111 price target, the same level it trimmed to from $128 in late February. The bank did not raise the target this week. It sharpened the thesis instead.

The argument is simple. Stablecoins are decoupling from crypto market cycles. USDC supply has climbed to about $78 billion this month, an all-time high, even as bitcoin has spent most of 2026 stuck below $90,000. Circle’s revenue, almost all of which comes from interest on Treasuries backing USDC, no longer rises and falls with token speculation.

That makes the stock a rates play wearing a crypto costume. As long as USDC supply keeps climbing and front-end Treasury yields stay near 4%, Circle prints cash whether retail traders are buying memecoins or dumping them.

The hedge sits inside the price target. At $111, Wells Fargo is below the current quote. Bernstein has a $190 target with Outperform. Baird is Outperform at $138. Clear Street is Buy at $152. Compass Point flipped to Strong Sell in April on yield-compression fears. The Street’s spread on Circle is the widest of any large-cap crypto name.

A quieter signal sits underneath. The Wells Fargo note hit roughly a week before Circle reports Q1, the spot where institutional desks usually lock in their pre-print views.

USDC’s $78 Billion Footprint Is The Real Story

Strip out the analyst chatter and Circle’s case rests on one number: how much USDC is in circulation, and where. The answer in May 2026 is more, in more places, than at any point in the company’s history.

Stablecoins now hold about $321.7 billion in combined market cap per DefiLlama’s live stablecoin supply dashboard, up from under $200 billion at the start of 2025. USDC alone added more than $20 billion in supply over the trailing twelve months.

The Bank Cheering Circle Is Building Its Own Rival

There is a contradiction sitting under the Wells Fargo call. The same bank that wants clients buying CRCL filed a US trademark for “WFUSD” on March 10, naming cryptocurrency payment processing, digital asset trading and tokenized asset software as covered uses. Translation: a Wells Fargo-branded dollar token built to compete with USDC.

Wells Fargo isn’t alone. JPMorgan Chase, Bank of America and Citigroup are studying a joint stablecoin per separate reporting, and Mastercard moved to acquire stablecoin payments firm BVNK in early May. The four largest US banks are now circling what Circle has spent a decade building. Wells Fargo’s own Investment Institute primer on digital assets argues the rails matter more than the chains.

The shape of the bullish case here, then, is bullish despite incoming bank competition, not in the absence of it. Wells Fargo’s research arm is effectively saying USDC’s regulatory moat, banking partnerships and CCTP cross-chain rails run deep enough to survive WFUSD if and when it ships.

That’s an unusual posture for a bank to put in writing. It also tells you which side of Circle’s growth curve the equity desk is taking.

The CLARITY Act Compromise Reset The Risk Stack

The May 4 spike in CRCL was not random. Sens. Thom Tillis of North Carolina and Angela Alsobrooks of Maryland released a compromise on the CLARITY Act over the prior weekend that explicitly preserves stablecoin reward and incentive programs.

The bill text reads, “No covered party shall, directly or indirectly, pay any form of interest on yield… solely in connection with the holding of such restricted recipient’s payment stablecoins,” before carving out incentives “based on bona fide activities or bona fide transactions.” That carve-out is the line between Circle’s existing partner economics staying legal and not.

Polymarket bettors now price the odds of the CLARITY Act becoming law before year-end at 62 to 64%, the highest reading since the bill was first introduced. Senate Banking Committee chairman Tim Scott has confirmed a markup will happen in May.

The Coinbase Cut Is The Number Bull Notes Skip

Bullish notes on Circle have a habit of glossing over one line: Coinbase keeps roughly half of USDC’s reserve income.

Per Circle’s S-1 filing, the exchange receives 50% of the residual revenue generated from the Treasuries backing USDC. The arrangement was negotiated when Coinbase still held minority equity in the joint venture that issued the token, and it survived the 2023 separation of the two companies.

Of the roughly $1.25 billion Circle generated in the first half of 2026, with 95.5% from interest income, a meaningful slice flows to Coinbase before it ever lands on Circle’s income statement. That single contract is the hidden tax on every USDC bull case.

The pact is the principal reason Compass Point and other bears keep their negative view in place. Any rate cut compresses Circle’s gross margin twice. Once on lower yields. Once on the same percentage handed to a partner.

Wells Fargo’s view is that this risk is already in the price. Circle’s market cap of about $26 billion implies a multiple low enough to absorb a 100 basis-point rate cut without breaking the thesis. Bears think that math is too generous.

“The CLARITY Act’s resolution of the stablecoin yield debate is a net positive,” Bank of America’s digital-assets team wrote in a research note dated May 1, adding the bill should “reduce regulatory uncertainty and allow banks to engage with digital-asset infrastructure on more controlled terms.”

What May 11 Has To Prove

The first-quarter print is the next forcing function. Circle has confirmed first-quarter 2026 results will land on May 11 with a webcast at 8 a.m. Eastern. Investors will look for confirmation that USDC supply growth has matched the regulatory tailwind narrative.

• $78 billion: USDC supply level analysts will watch on the call.
• 95.5%: share of H1 2026 revenue that came from interest income.
• 50%: Coinbase’s residual share of USDC reserve income per Circle’s S-1.
• $131 million: H1 2026 adjusted EBITDA, up 53% year over year.

CEO Jeremy Allaire is also likely to update progress on Arc, Circle’s payments network for banks, and on the Circle Payments Network designed to plug stablecoins into corporate treasury workflows.

Frequently Asked Questions

When Does Circle Report Q1 2026 Earnings?

Circle reports first-quarter 2026 results on Monday, May 11, with a live audio webcast at 8 a.m. ET. The numbers and replay will go up on Circle’s investor relations site at investor.circle.com on the same morning. Watch USDC average circulation, reserve yield and Coinbase distribution payments as the three figures most likely to move CRCL after the print.

How Does Circle Actually Make Money?

Almost entirely from short-term US Treasuries. Circle holds the cash backing every USDC token in a regulated reserve, and pockets the interest those Treasuries pay. In the first half of 2026, 95.5% of Circle’s $1.25 billion in revenue came from that interest. The rest came from minting and redemption fees, FX, and developer products. If Treasury yields drop, Circle’s revenue drops with them.

What Is The CLARITY Act And Why Does It Matter For Circle?

It is the US market structure bill that defines who regulates which crypto assets. The May compromise from Sens. Tillis and Alsobrooks blocks bank-style yield on stablecoin balances but allows usage-based rewards tied to transactions or staking. That preserves the partner economics behind USDC. Senate Banking is expected to mark the bill up in May, and Polymarket pegs full passage at roughly 63% by year-end.

Will Wells Fargo’s WFUSD Replace Circle’s USDC?

No, not in the near term. Wells Fargo only filed the WFUSD trademark on March 10, 2026, and bank-issued stablecoins still need regulatory greenlights, custody plumbing and reciprocal acceptance with rivals. Wells Fargo’s own equity desk just told clients USDC’s lead is wide enough to survive bank entrants. Watch the trademark file at the USPTO and any Fed or OCC guidance on bank deposit tokens.

Is Circle Stock A Buy Above $119?

Wall Street is split. Bernstein sees $190, Clear Street $152, Baird $138, Wells Fargo $111 with Overweight, and Compass Point a Strong Sell. The honest answer is that Circle is leveraged to two variables most retail investors don’t track daily: USDC net issuance and the front end of the Treasury curve. If you can’t model both, size the position small and wait for the May 11 print before adding.

The setup heading into May 11 is unusual for a crypto-adjacent name. The bull case rests on declining drama, not rising prices, and the bear case rests on a single revenue-sharing line in a multi-year contract. Either way, Wells Fargo has put its name on the call that the next leg of digital dollars will look more like Treasury management software than a meme.