Circle reports second-quarter earnings this morning, August 5, 2026, and the analyst gap it has to settle is the widest of any crypto-linked stock on the board. Circle is the company behind USDC, a dollar-pegged stablecoin, and it earns most of its revenue as interest on the Treasury reserves that back the token. On Monday, August 3, Morgan Stanley cut its target on the stock to a Street-low $38, per CoinDesk, while the mean target across 21 analysts still sits near $120. One of those camps is badly wrong, and today's print is the hardest evidence either side will get this quarter.
The report lands with the management webcast at 8:00 AM ET, so the numbers arrive at or after the time you read this. Everything below is the pre-event map, the claims each side has staked, and the specific lines in the release that settle the argument.
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CRCL into the print
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Reading
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Share price
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About $62, down roughly 30% in 2026 (Benzinga)
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July performance
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Worst month in the company's history (Benzinga)
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Short interest
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Rising into the report (Benzinga)
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Q2 revenue consensus
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Roughly $714M-$744M depending on provider
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Q2 EPS consensus
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$0.16-$0.18 depending on provider
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Earnings webcast
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8:00 AM ET today, August 5, 2026, per Circle's investor relations page
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A Stock Coming Off the Worst Month It Has Ever Printed
July was the worst month in Circle's trading history, a history that only dates back to its June 2025 IPO, and Benzinga reports short sellers have been adding to positions into today's report. The damage did not start last month. The stock has absorbed two separate single-day crashes this year, first the stablecoin yield-ban selloff we broke down when CRCL lost 20% in a session, then the June 30 drop we covered when the Open USD consortium plan landed and took another 17% off in a day.
Against that tape, the revenue bar is not standing still. Consensus clusters between roughly $714 million and $744 million depending on the provider, with Benzinga's compiled estimate at $713.7 million and $0.16 in EPS, Zacks and Yahoo carrying $734.7 million for about 11% growth, and Moomoo at the top with $744 million and $0.18. Treat that as a range, because scoring the print against a single provider's number is how traders get faked out at the open.
A stock this beaten up walking into a report this contested is exactly the setup where the reaction can outrun the numbers in either direction. That is why the two loudest calls on Wall Street matter more than usual today.
Inside Morgan Stanley's $38 Call
Morgan Stanley moved to Underweight on August 3 and slashed its target from $106, per CoinDesk, making it the lowest target on the Street by a wide margin. The bank's core logic is supply. USDC in circulation ended the second quarter around $73 billion, down from $77 billion at the end of the first quarter, and Circle's revenue is a direct function of that float. Fewer tokens outstanding means a smaller reserve pile earning interest, and a shrinking base undercuts the growth multiple the stock still carries even after this year's decline.
The note also reaches for a striking small number. Morgan Stanley cites roughly $41,900 per day in agentic payments activity, its way of arguing that the AI-commerce narrative attached to USDC remains a rounding error in the actual flows today.
And the timing sharpens the sting. A Street-low target published 48 hours before the print reads as a dare, because a strong report would discredit it almost immediately while a weak one would make $38 the number every headline quotes.
The Bull Case Runs Through $82 and $120
TD Cowen took the other side of the trade, initiating coverage at Buy with an $82 target, and the 21-analyst mean near $120 implies the average forecaster still sees the stock roughly doubling from here. The bulls are not pricing in the same company Morgan Stanley describes.
Their case rests on the franchise around the float. Circle has spent 2026 widening its product surface, launching cirBTC on Ethereum for institutional DeFi collateral and pushing USDC adoption talks with banks and exchanges in South Korea. None of that shows up meaningfully in a quarterly revenue line yet. All of it is the kind of optionality a $120 mean target needs to be defensible, and today's call is where management gets to argue the pipeline is real.
There is also the competitive question hanging over every model. The Open USD consortium token, which we profiled when the Visa, Mastercard and BlackRock-backed project was announced, was built to hand reserve yield to the businesses that adopt it. Bulls argue the threat is priced in after a 30% down year. Bears argue it has barely started to bite. The supply trajectory in today's release is the first clean read on who is right.
The 62% Counter-Fact Both Camps Have to Explain
One number refuses to fit the bear story. USDC handled $849 billion in stablecoin trading volume in July, 62% of the market, against $502 billion for USDT, per CoinGape. Market share expanded through the exact stretch when the token's supply was contracting, and that combination is the tension at the center of this print.
The two numbers measure different things, which is why both can be true at once. Volume tracks how hard each token is working, while supply tracks how many dollars sit parked in it, and Circle only earns on the parked dollars. Fewer dollars in the float, moving faster, describes a payments rail gaining traction even as its interest-earning base thins out. You can check the live float anytime against USDC market data on CoinGecko.
Which number wins depends on what USDC is becoming. If it matures into settlement infrastructure, velocity eventually attracts float back as businesses hold working balances. If holders keep redeeming while traders merely pass the token around, revenue keeps eroding no matter how dominant the volume share looks. Today's supply figure is the referee.
How Circle Actually Makes Money
Think of USDC as an interest-free loan from tokenholders to Circle. Holders hand over dollars, receive tokens that pay them nothing, and Circle parks those dollars in short-term Treasuries and cash equivalents, keeping the interest. If the mechanics of pegged tokens are new to you, our stablecoin explainer covers how the reserve model works across issuers.
That structure makes the company a leveraged bet on two variables. The first is rates. With the Fed holding at 3.50-3.75% under chair Kevin Warsh, reserve yield remains rich, and today's crowded macro calendar, which our separate oil-crash and Hormuz deal-watch piece tracks this morning, decides how long that backdrop holds. In the first quarter, labeled as Q1, Circle produced $694 million in revenue, up 20% year over year, on a 3.5% reserve return.
The second variable is what Circle keeps. A large share of reserve income flows out the door to its distribution partner, the firm that helps put USDC in front of users, so the gross yield on $73 billion is not what reaches shareholders. When supply shrinks, the interest base falls, but those distribution payments do not scale down as cleanly, which squeezes the margin from both ends. That is the quiet mechanism inside Morgan Stanley's model, and it is the line most previews skip.
What to Watch When the Numbers Land
Reserve return. Q1's 3.5% is the baseline. A figure holding near that level says the rate tailwind is intact, while a slide would show the yield curve already leaning on revenue before any Fed cut arrives.
Distribution costs. Watch what percentage of reserve income leaves the building. If the payout ratio to the distribution partner creeps up while the float shrinks, the bear math compounds. If Circle shows any improvement in those economics, the margin story changes fast.
Supply trajectory. The June quarter-end float is the anchor for the whole bear case, so any commentary on July and August balances tells you if the contraction extended into the third quarter or reversed alongside that 62% volume share.
For the human context behind these line items, our same-day profile of Jeremy Fox-Geen, the CFO presenting today's numbers, walks through how a stablecoin finance chief actually manages this machine.
Frequently Asked Questions
When does Circle report earnings?
Circle reports second-quarter 2026 results today, August 5, 2026, with the management webcast at 8:00 AM ET. The release lands before the US market open, so early trading will already reflect the numbers by the time most retail traders react.
What is Morgan Stanley's price target for Circle stock?
Morgan Stanley carries a $38 target with an Underweight rating, cut from $106 on August 3, 2026, per CoinDesk, and it is the lowest target on Wall Street. From current levels around the low $60s, that implies roughly 40% further downside, our arithmetic based on the published target.
Why is USDC supply falling in 2026?
Stablecoin supply falls when holders redeem more tokens for dollars than new buyers mint, shrinking the outstanding float. Redemptions have outpaced minting even as trading activity grew, which suggests idle balances are leaving while transactional use expands. Rate expectations matter too, since holders parking cash elsewhere can earn yield USDC itself never pays them.
Is USDC affected if Circle stock drops?
The token's backing does not depend on Circle's share price. USDC is redeemable against a segregated reserve of cash and short-term Treasuries held apart from company assets, and equity swings land on shareholders. A falling stock reflects doubts about Circle's future earnings power, and the peg mechanism operates independently of that repricing.
Bottom Line
Circle walks into this morning's webcast with shorts pressing, a Street-low target 48 hours old, and a mean forecast that needs the stock to double. If the print shows reserve return holding near Q1 levels and the float stabilizing, the supply-contraction engine behind the bear case loses its fuel and the crowded short side becomes the story. If distribution costs climb and management signals the float kept shrinking through July, Morgan Stanley's math graduates from outlier to base case. Skip the headline revenue number at 8:00 AM ET and go straight to the supply commentary, because every other line in this fight is downstream of where the float goes next.
This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency trading involves substantial risk. Always conduct your own research before making trading decisions.
