Circle's profits in the second quarter significantly outperformed expectations, attributed to the growing adoption of USDC tokens. The surge in USDC circulation, accompanied by a marked increase in onchain transaction activity, highlighted a positive trend. Despite a dip in the reserve return rate during this period, stronger circulation volumes partially mitigated the effects of reduced yields.

The bank said tokenized money market funds, Open USD and slower USDC growth could weigh on the stablecoin issuer's earnings.

TD Cowen initiates Circle Internet Group with a Buy rating and $82 price target, citing USDC growth and fee-based revenue as key catalysts.