Analyst Coverage Overview
On Monday, Morgan Stanley downgraded Circle Internet Group, the issuer of the USDC stablecoin, moving its recommendation from equal‑weight to underweight and cutting its price target from $106 to $38. The brokerage also reduced its USDC circulation forecasts by roughly 33 % for 2027 and 44 % for 2028, which translates into earnings estimates about 20 % below the Wall Street consensus for 2028. Morgan Stanley cited slowing growth of USDC, heightened competitive pressure, and the expectation that Circle’s shift toward transaction‑based revenue will take longer and be less profitable than the market anticipates. It further warned that stablecoin usage remains concentrated in crypto trading and transfers rather than payments, limiting the durability of USDC balances, and that tokenized money‑market funds, tokenized bank deposits and consortium‑backed initiatives such as OpenUSD could erode Circle’s reserve‑income model, while emerging payment opportunities such as agentic commerce are too small to materially boost earnings.
In contrast, TD Cowen initiated coverage of Circle with a buy rating and an $82 price target. The firm argues that investors are overly focused on Circle’s reserve‑income business and are overlooking its broader evolution into a digital financial‑infrastructure platform that includes payments, treasury services, tokenized assets, interoperability and developer tools. TD Cowen projects USDC circulation to expand at an approximate 31 % compound annual growth rate through 2030. It expects fee‑based revenue from products such as the Circle Payments Network, the Cross‑Chain Transfer Protocol, StableFX and Arc to grow substantially faster than reserve‑income, thereby reducing the company’s dependence on interest‑rate movements.
TD Cowen also highlighted potential catalysts such as increasing regulatory clarity, greater institutional adoption and the long‑term optionality of the Arc product, while acknowledging risks that include lower interest rates, the emergence of bank‑issued stablecoins, competition from OpenUSD, tokenized deposits and a slower than anticipated monetisation of Circle’s platform initiatives.