Circle (CRCL) stock is on a red-hot run into the summer months.

The stablecoin issuer’s stock is up 38% to $135 in May, helped by a 16% pop on Monday following mixed earnings. The stock also got a jolt yesterday from a surprise $222 million token presale of ARC to investors led by BlackRock, a16z, Apollo, and others. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)

“This is incremental revenue not in estimates, with potentially another sale round to follow (current round was presale) and other ancillary blockchain revenue opportunities,” Bernstein analyst Gautum Chhugani said in a note on Tuesday.

“As we head towards potential rate cuts, any incremental fee income helps Circle offset the short term impact, while raw USDC supply growth offsets any rate impact in the medium to long term. Thus, the ARC incremental revenues made Circle stock more digestible in the near term,” he said.

ARC is a native token for a blockchain Circle plans to launch. Chhugani reiterated an Outperform rating on Circle and a $190 price target.

Read more: How to start buying crypto for $100

The investment thesis on Circle has solidified in recent weeks.

Circle said on Monday that first quarter revenue and reserve income of $694 million increased 20% year over year. Adjusted operating profits increased by 24% from the previous year.

Circle co-founder and CEO Jeremy Allaire told Yahoo Finance (video above) that Big Tech players such as Meta (META) and DoorDash (DASH) have begun to use stablecoins. That undercut the market view that these companies would issue their own stablecoins and compete with Circle.

The stock has also gotten a boost from the Trump administration’s push for a more favorable regulatory framework. Last summer, President Trump signed the first federal legislation for dollar-pegged stablecoins like USDC (USDC-USD).

After much delay, the Senate Banking Committee is planning a markup hearing on Thursday on another major crypto bill, the CLARITY Act. The hope is that the bill is signed before August.

Allaire said the act’s eventual passing would be a milestone moment for Circle.

“We think passage of CLARITY would remove a key terminal risk overhang for Circle’s ability to grow USDC market cap via its distribution partners’ reward programs,” JPMorgan analyst Ken Worthington wrote in a note.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.