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Mizuho cuts Circle to underperform and lowers target to $50
The bank said Open USD's pass through model could shift more reserve income to distributors and pressure Circle margins, including around a Coinbase revenue sharing renewal in August.
Mizuho downgraded Circle to underperform from neutral and cut its price target to $50 from $85, citing growing competitive pressure from Open USD.
CoinDesk reported that Mizuho argued Open Standard's dollar backed stablecoin model, unveiled June 30, could fundamentally alter Circle's economics by requiring the company to share more of its reserve income with distribution partners, which would compress margins.
The bank also lowered its Circle 2027 adjusted EBITDA forecast to $699 million, about 25% below Wall Street consensus, and warned that an upcoming Coinbase revenue sharing agreement renewal could add additional margin pressure.
CoinDesk noted that Circle's USDC has lost momentum, with circulating supply falling to about $73 billion from nearly $80 billion in March, as the broader stablecoin market shrank by roughly $10 billion since May amid softer crypto activity and competition from newly regulated issuers.