76report

February 26, 2026

Tech and Crypto Snap Back

Investors are still wrestling with AI’s long-term impact on the economy and markets. Not long ago, the main concern was that AI was overhyped—a bubble built on unrealistic expectations.

But more recently, the narrative has flipped: what if AI is so powerful that it crushes profit margins and disrupts established business models across entire industries?

That tension has contributed to a volatile start to the year in both tech and crypto. The selling, particularly in software names, has been sharp. But volatility cuts both ways. The NASDAQ Composite rebounded more than 1% yesterday and is approaching flat on the year.

Two weeks ago, in Capitalizing on the Tech Downturn (2/11/2026), we argued that the pressure on select tech and crypto-related companies was becoming indiscriminate. In our view, at least one high-quality name had been pulled down by sentiment rather than substance, presenting a compelling entry point.

We added that stock to two Model Portfolios on February 11 and also provided our analysis to 76report subscribers. Since then, through the end of trading yesterday, the shares have gained more than 40%—helped by an extremely well-received fourth-quarter earnings report.

Even after the rebound from deeply depressed levels, we continue to view this company as a highly attractive long-term beneficiary of structural trends in AI and blockchain infrastructure. Our updated analysis follows.

Circle (CRCL): Sentiment Reverses on Impressive Q4 Results  

When we first wrote about Circle (CRCL) on 2/11/2026 (click here to access original report), we described it not as a “crypto company,” but as a regulated digital-dollar platform positioned to become core infrastructure within the global financial system.

At the time, we noted that while CRCL had performed strongly following its June 2025 IPO, it had since come under intense pressure amid the broader sell-off in software and crypto-related stocks.

Yesterday’s earnings release reminded investors why the story resonated in the first place. Shares surged 35% in a single session, bringing the total return since we added the position to the American Resilience and Inflation Protection Model Portfolios on February 11 to 44%.

The sharp move naturally raises an important question: does the opportunity remain?

Even after the rebound, CRCL closed yesterday at $83—still more than 70% below its post-IPO high of nearly $300. While enthusiasm may have run too far immediately following the listing, the stock traded comfortably above $100 as recently as late 2025.

Notably, even after yesterday’s rally, shares remain below levels seen in early January 2026.

CRCL Share Price since 6/5/2025 IPO

What the market liked

Yesterday’s earnings report reminded investors of CRCL’s strong positioning and vast growth prospects as a leading player in stablecoins.

Key operational highlights from the fourth quarter earnings report include:

• USDC usage is scaling rapidly: Stablecoin circulation exceeded $75 billion (+72%) with $11.9 trillion in fourth quarter transaction volume.

• Revenue growth remains powerful: Q4 revenue grew 77%, reflecting higher USDC balances and ecosystem activity.

• Profits rebounded: CRCL generated $133 million in net income, demonstrating strong operating leverage.

• Platform momentum building: Circle Payments Network now has 55 enrolled institutions.

• Confident outlook: Management is targeting sustained 40% stablecoin growth and steady margins into 2026.

New avenues of growth

On the investor conference call following the earnings release, CRCL’s leadership emphasized that stablecoins are moving beyond crypto trading and becoming core infrastructure for the “Internet financial system.”

Growth in USDC (the main stablecoin product) remains strong, even after the recent crypto correction. Management sees accelerating real-world adoption across payments, capital markets, and enterprise use cases.

A major theme was AI and agentic commerce.

Management noted that we have already entered a new world in which AI agents increasingly transact with one another, creating demand for programmable, low-cost digital dollars.

Nearly all early agent-to-agent payment activity is happening with USDC. CRCL is building the tools needed to support that growth, including infrastructure designed for high-speed, ultra-low-cost transactions.

Regulation was described as a tailwind. The GENIUS Act and related guidance from regulators are providing clarity that is encouraging banks, fintechs, and large enterprises to integrate stablecoins. Additional legislation could further unlock capital markets use cases.

On the platform side, Arc (Circle’s blockchain) is progressing toward launch and is designed to support tokenization, interoperability, and AI-driven transactions. The Circle Payments Network continues to expand, with growing institutional participation and cross-border settlement activity.

We are entering a world where, in my view, likely tens or hundreds of billions of AI agents will interact and perform economic functions over the Internet. And my own view is that in a world of tens or even hundreds of billions of AI agents, the velocity of money is just going to be multiple orders of magnitude higher than it is today in the existing economic system. And so we're building a new economic infrastructure. We're building a new Internet financial system. - CRCL Chairman and CEO Jeremy Allaire (2/25/2026)

Early innings

Despite $75 billion in USDC circulation and massive transaction growth, management framed stablecoins as foundational infrastructure only beginning to expand into real economic use.

The business model is now showing meaningful operating leverage. Revenue is scaling, margins remain resilient, and profitability is improving even in a moderating rate environment.

More importantly, the use cases are broadening.

This is no longer just about crypto trading. Cross-border payments, institutional settlement, tokenized assets, and emerging AI-driven transactions are becoming meaningful demand drivers. If autonomous AI agents begin transacting at scale, programmable digital dollars are a natural settlement layer.

CRCL’s platform strategy is built around that seemingly inevitable future. Stablecoin adoption is now expanding across multiple fronts, with CRCL emerging as a central player in building the next generation of digital financial infrastructure.

With a market capitalization still below $20 billion, the company’s long-term upside potential is open-ended, so long as it continues to execute, innovate and leverage its platform dominance.

Circle Internet Group (CRCL)

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