Mizuho downgraded Circle to underperform and cut its price target to $50 from $85 (a 41% reduction), implying roughly 21% downside from the current $63.22, while raising 2027 distribution and transaction cost assumptions to 73% and trimming 2027 adjusted EBITDA to $699 million from $1.09 billion. Analysts warn the June 30 launch of Open USD—backed by more than 140 firms including Visa, Mastercard and Coinbase—and a revised Hyperliquid revenue-sharing deal are pressuring USDC economics, threatening Circle’s revenue model and contributing to CRCL’s >20% year-to-date decline amid broader crypto and stablecoin adoption shifts.

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In Brief

Mizuho downgraded Circle to underperform and dropped its target to $50 from $85.
Analyst Dan Dolev warned Open USD could reshape Circle's revenue business model.
JPMorgan cut Circle and Coinbase estimates after the Hyperliquid deal.

Investment bank Mizuho downgraded Circle (CRCL) to underperform from neutral. The bank also cut its price target for the stock, citing threats from Open USD.

The downgrade landed as JPMorgan also lowered its Circle and Coinbase (COIN) estimates. Both banks pointed to mounting pressure on the economics behind USDC (USDC).

Open USD Rattles Circle’s Model

The Japanese bank slashed its price target to $50 from $85, a cut of more than 41%. From Circle’s current price of $63.22, the new target points to roughly 21% downside.

Mizuho analyst Dan Dolev sees Open USD as the biggest threat. The dollar-backed token launched on June 30. It is backed by more than 140 companies, including Visa, Mastercard, and Coinbase.

The rival token lets businesses mint and redeem for free while partners keep the reserve earnings after a small fee. That design diverges from Circle’s model. According to Dolev,

“…could fundamentally alter CRCL’s business model, which relies on retaining a large portion of the treasury yield to drive revenues…We believe that over time, distribution partners will be emboldened to demand more from CRCL.”

Meanwhile, Mizuho also raised its 2027 distribution and transaction cost estimate to 73% from 64%. It cut 2027 adjusted EBITDA to $699 million from $1.09 billion.

JPMorgan Flags a Hyperliquid ‘Prisoner’s Dilemma’

JPMorgan also struck a cautious tone, flagging mounting strain on the economics behind Circle’s USDC. Analysts led by Kenneth Worthington cut forecasts for Circle and Coinbase, per Bloomberg.

The bank flagged the revised revenue-sharing deal with Hyperliquid. Worthington said the structure pushes the two partners to compete against each other.

“We think the change in the Hyperliquid relationship showcases the challenge for Circle and Coinbase partnership agreements because it can create a prisoner’s dilemma that drives Coinbase and Circle to compete with each other when promoting USDC distribution,” Worthington said.

Circle (CRCL) Stock Performance. Source: Google Finance

The bearish outlook holds as the stock continues to face pressure amid a broader crypto downturn. CRCL has fallen more than 20% this year. Shares closed slightly higher at $63.22 on Tuesday.

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