Circle (CRCL) nearly 50% higher in two sessions since earnings results

CoinDesk

by Krisztian Sandor

February 26, 2026

AI-Generated Deep Dive Summary

Circle (CRCL) shares have surged nearly 50% over two trading sessions following its latest earnings report, but the rally is largely due to a short squeeze rather than strong financial performance. Analysts suggest that hedge funds' overcrowded bearish positions were the primary catalyst for the sharp price movement, with many institutions forced to cover their short bets as the stock climbed. This phenomenon has wiped out significant losses for these hedge funds, estimated at around $500 million in a single day. While Circle reported solid growth in its USDC stablecoin circulation, which increased by 72% year-over-year to $75.3 billion, the company's profitability has declined despite rising demand for stablecoins. Circle swung from a net profit of $156 million in 2024 to a $70 million loss last year, driven by higher distribution costs associated with expanding adoption. However, the company's earnings did beat analyst expectations, particularly on revenue and profit metrics, which eased investor concerns following a period of pessimism. Analysts at Mizuho raised their price target for Circle to $90 from $77, citing strong performance in prediction markets and growing optimism around "agentic commerce," where AI-driven transactions using USDC are expected to play a key role. Despite this positive outlook, the firm maintained a neutral rating on the stock, cautioning that lower interest rates could impact reserve income. The rally also highlights the broader market dynamics at play in the crypto sector. The short squeeze underscores the risks of crowded trading positions and the potential for rapid price movements driven by technical factors rather than fundamentals. For investors, understanding these market mechanics is crucial, as they can significantly influence asset prices even when underlying financial performance is mixed. Circle's ability to position itself as a key player in emerging trends like AI-driven commerce and prediction markets has also garnered attention from analysts. With its stablecoin USDC increasingly being

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Originally published on CoinDesk on 2/26/2026