How the war in Iran and trader positioning could be behind the surge in Circle's stock
Shares were up another 9.7% on Monday, bringing them nearly to double over the past month.
By Will Canny|Edited by Stephen AlpherUpdated Mar 9, 2026, 8:50 p.m. Published Mar 9, 2026, 8:49 p.m.
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What to know:
- Circle shares rose about 10% Monday and are now higher by 86% over the past month.
- Analysts suggest the war in Iran and its impact on oil prices could delay Federal Reserve rate cuts, thereby benefiting the stablecoin issuer.
- Also at work was heavy bearish trader positioning in the shares and the need for those shorts to be covered after the company reported solid fourth-quarter results.
Already on a tear ahead of the war in Iran, Circle (CRCL) might be an unlikely beneficiary of the conflict.
The stock rose 10% on Monday, outperforming other crypto-linked equities, with the shares now up by 86% over the past month, though they remain sharply lower since their peak post-IPO frenzy last summer.
Japanese bank Mizuho said part of the Circle rally reflects the jump in oil prices following the escalation in Middle East tensions. Higher crude prices could reignite inflationary pressures, potentially reducing expectations for Federal Reserve rate cuts.
Other things being equal, stablecoin issuers are thought to benefit from higher interest rates as that means higher yields on their invested dollars.
Indeed, oil prices have surged since hostilities erupted in the Gulf, with WTI crude up roughly 35% since Feb. 28. Higher energy prices tend to fuel inflation and can limit central banks’ ability to cut interest rates.
Positioning has surely played a role as well.
While the company reported solid growth in USDC supply in its fourth-quarter earnings, analysts say the magnitude of the move likely reflected a crowded short trade ahead of the release.
“The magnitude of the move wasn’t purely about the headline numbers. Positioning was the real catalyst,” said Markus Thielen, founder of 10x Research.
According to his data, hedge funds had accumulated sizable bearish bets ahead of the report. That setup created what Thielen described as a “high-probability short squeeze rather than a fundamental re-rating.”
Short interest currently stands at about 13% of the float, equivalent to roughly two days to cover, according to FactSet data.
Read more: Circle moves $68 million in just 30 minutes by using its own stablecoin for internal payments
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It's been a historic 24 hours for crude oil, which soared to $120 per barrel overnight on Iran worries, but has plunged back to just above $80.
What to know:
- Crypto assets, including crypto-related stocks extended their gains on Monday afternoon after U.S. President Donald Trump said the war with Iran could be over soon.
- U.S. equities rose sharply following the news, erasing early morning losses.
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