The burgeoning world of prediction markets is having a surprisingly significant impact on the financial fortunes of Circle Internet Group, the issuer of the USD-pegged stablecoin USDC. A recent upgrade from Mizuho Securities, coupled with a surge in trading volume on platforms like Polymarket, is driving renewed investor interest and bolstering USDC demand.
Mizuho raised its rating on Circle shares to “neutral” from a previous downgrade, and increased its price target to $77, a substantial jump from the $70 target set in November. This shift in perspective is directly linked to the growing use of USDC for settlement on Polymarket, a platform allowing users to bet on the outcomes of future events. Analysts at Mizuho recognize that Polymarket is attracting a demographic largely outside the traditional cryptocurrency space, effectively expanding the reach of USDC and driving incremental demand.
The correlation between Polymarket’s growth and USDC demand is stark. All bets on the platform are settled in USDC, creating a direct line between increased trading activity and the need for more of the stablecoin. Polymarket, which recently reopened limited access to US users following a 2022 enforcement action by the Commodity Futures Trading Commission, is now, alongside its competitor Kalshi, facilitating over $10 billion in monthly trading volume. This level of activity signals a potential for sustained expansion of the USDC market.
Circle’s market capitalization has already demonstrated significant growth, roughly doubling from $30 billion in early 2024 to over $60 billion by March 2025, and reaching approximately $75 billion by the end of 2025. Mizuho analysts project that continued growth in prediction markets over the next one to two years could add billions to USDC’s market cap and, crucially, support Circle’s revenue streams. The company’s stock price reflected this optimism, rising more than 3.5% on Wednesday to trade near $72.50, though it had previously experienced a surge to nearly $300 following its initial public offering.
The significance of Polymarket isn’t simply about volume; it’s about user acquisition. Mizuho highlights that the platform is drawing in a substantial number of users who are new to cryptocurrency, accessing the ecosystem through event-based trading. This represents a novel, non-DeFi (decentralized finance) channel for USDC growth, a strategic pivot that Mizuho is now valuing more highly. This influx of new users is particularly important as it diversifies the demand for USDC beyond the traditional crypto-native audience.
However, the bullish outlook isn’t without caveats. Analysts at Mizuho and CoinAlertNews caution that the 25% potential upside for USDC’s market cap is heavily reliant on sustained retail speculation within these prediction markets. This makes the growth vulnerable to potential regulatory shifts impacting platforms like Polymarket. Any changes in the legal landscape surrounding prediction markets could significantly dampen demand for USDC.
The financial impact on Circle isn’t solely tied to the supply of USDC, but rather to its velocity – how frequently it’s being used. Increased activity in prediction markets translates directly into higher transaction fees and greater circulation, providing a nuanced growth metric for investors to consider. This focus on velocity represents a shift in how analysts are evaluating Circle’s potential.
The recent surge in activity on Polymarket, particularly at the start of 2026, has been a key catalyst for this renewed momentum. The platform’s decision to settle all contracts in USDC has created a clear and direct link between its trading growth and the demand for the stablecoin. Polymarket has also strategically expanded its categories beyond traditional political events, incorporating themes from sports, economics, and entertainment, further broadening its appeal and driving sustained activity.
Coinbase analysts, observing the broader trend, identify stablecoins as “quiet winners” in this evolving landscape. The substantial, high-velocity demand for USDC generated by Polymarket’s trading volume underscores the critical role stablecoins play in facilitating activity within these emerging markets. The success of USDC is not just a win for Circle, but a signal of the growing importance of stablecoins in the broader digital asset ecosystem.
A post from lufei on social media noted that the 2024 and 2025 World Cup events in June and July contributed to USDC growth, though specific details were not provided. This anecdotal evidence aligns with the broader trend of event-driven trading boosting demand for the stablecoin.
As Polymarket continues to expand and attract new users, the future of USDC appears increasingly intertwined with the success of prediction markets. The coming months will be crucial in determining whether this growth is sustainable and whether Circle can capitalize on this new avenue for revenue and market expansion.
