Key Takeaways – Mizuho downgraded Circle from Neutral to Underperform and cut its price target from $85 to $50. – Analysts cite mounting pressure on the economics of the USDC business. – The bank also slashed its 2027 earnings outlook, raising its forecast for Circle’s…
stribution expenses. Circle is facing renewed scrutiny from Wall Street after Japanese investment bank Mizuho downgraded the stablecoin issuer from Neutral to Underperform and slashed its price target from $85 to $50
The bank cited growing concerns that rising competition could fundamentally weaken the economics behind USDC. The downgrade reflects a broader debate emerging across the stablecoin industry: as new entrants compete by sharing more of their reserve income with partners, can Circle continue to generate the high margins investors have come to expect? Mizuho believes the answer is becoming less certain, particularly following the launch of OpenUSD, a new stablecoin initiative backed by more than 140 companies.
Mizuho Warns OpenUSD Could Reshape Stablecoin Economics According to a CoinDesk report citing analysts led by Dan Dolev, Mizuho believes OpenUSD’s business model could significantly alter how reserve income is distributed across the stablecoin ecosystem. Unlike Circle’s current structure, where reserve income is earned first before portions are shared with distribution partners, OpenUSD plans to distribute the majority of reserve earnings directly to issuers and ecosystem participants after deducting only a small management fee. That approach, Mizuho argues, could force Circle to offer more attractive revenue-sharing agreements in order to retain key partners.