Arc token sales strengthened Circle's financial position: new forecast for 2026
Circle's second-quarter report featured a landmark event: the company significantly raised its revenue and RLDC margin forecast for 2026. My analysis shows that this optimism is supported not by organic growth, but by a one-time sale of tokens from its own Arc blockchain, giving the USDC issuer a strategic breather amid a prolonged bearish trend in the crypto market.
Key metrics remained stable: total revenue and reserve income reached $701 million, while adjusted EBITDA grew 8% year-over-year to $143 million. However, the main intrigue lies in the revised targets: the forecast for other revenue in 2026 was raised to $310–330 million from the previous $150–170 million, and the expected RLDC margin to 41.7–43.7% from 38–40%. This is a direct result of the pre-sale of the native Arc token, which brought in about $180 million of the revised range.
Arc — a new driver, but for now one-time
Arc is Circle's own first-layer blockchain, where USDC serves as the native gas token. The company is moving up the technology stack: previously it issued tokens for other networks, now it manages its own infrastructure and can earn not only from reserve yields but also from transaction fees. The public mainnet launch is scheduled for September 16, and among institutional validators are BlackRock and DTCC, giving the network real coverage at the start.
However, it is important to understand: recurring revenue from Arc — staking, fees, and commercial services — will only appear after the launch and will depend on actual activity. For now, the nearest financial result was driven precisely by the sale of the token itself, creating a temporary but not permanent cushion.
Risks from rates and distribution have eased
Circle's business depends on three variables: the volume of USDC in circulation, the yield on reserve assets, and the share of that yield remaining after distribution costs. Reserve yields in the second quarter stood at 3.48% and declined along with SOFR, but this source remains the foundation of the business. No sharp drop in rates is expected in the near term, and the agreement with Coinbase has been extended on the same terms, removing the risk of a rising share for the largest partner.
Excluding the Arc token sale, the RLDC margin for the year is expected to be around 39% — in the middle of the previous range. This confirms the resilience of the operating model, but further profit growth will directly depend on the recovery of USDC circulation volume.
Weak on-chain activity weighs on USDC, but a cycle reversal will bring a strong rebound
Circle's long-term base scenario assumes USDC volume growth of 40% per year, but it is currently contracting. The investment debate boils down to a key question: will new USDC use cases grow fast enough to offset the cyclical decline in on-chain activity.
USDC and USDT are increasingly serving different functions. USDT primarily works as a payment and transfer tool, while USDC is closer to a trading, collateral, and settlement asset. This makes USDC more sensitive to risk appetite within the industry: on-chain trading volumes have fallen sharply from cycle highs, and liquidity has tightened.
However, there are also positive signals. Perpetual DEXs are growing liquidity and market share, creating sustained demand for USDC balances. Hyperliquid remains the leading example: perpetual contract volume over the last 30 days reached approximately $200 billion. Prediction markets, such as Polymarket, also provide a second source of structural demand.
My conclusion: the one-time sale of Arc tokens is a smart tactical move that gives Circle time to weather the downtrend. But sustainable company growth is only possible with a recovery in on-chain activity. If the market finds a bottom in the fourth quarter and activity recovers next year, USDC will be well-positioned for a powerful rebound.
This material is not investment advice.