Wall Street turns cautious on Circle as analysts warn USDC economics face mounting pressure

Wall Street analysts are growing more cautious on Circle as competition ramps up in the stablecoin market, with Mizuho downgrading the stock and JPMorgan lowering earnings estimates, each citing concerns that the economics underpinning USDC are coming under pressure on multiple fronts.

Mizuho downgraded Circle (CRCL) to Underperform from Neutral and slashed its price target by over 41%, to $50 from $85.

On the same day, JPMorgan lowered earnings estimates for Circle and Coinbase, with both firms pointing to growing strains of Circle's (USDC) economics.

Circle Internet Group (CRCL) stock price chart. Source: The Block/TradingView

For Mizuho analyst Dan Dolev, the biggest of these threats is Open USD, a new dollar-backed stablecoin backed by a consortium of more than 140 financial, tech and crypto companies, including Visa, Mastercard, Stripe, BlackRock and Coinbase.