Bullish
Morgan Stanley Downgrades Circle to Underweight, Cuts Target 64% to $38
2026-08-04 04:50:47
Circle stock drops 6% after Morgan Stanley lowers price target to $38, citing slowing USDC growth and competition from tokenized money market funds.
Woofun AI reports that Morgan Stanley downgraded Circle Internet Group (CRCL) to underweight, reducing its price target from $106 to $38. This action triggered a 6% decline in early trading, with shares previously valued at $60.88.
The bank cites decelerating growth of USDC and rising competition from tokenized money market funds, including those by BlackRock, as key risks to fee revenue. While USDC remains the second-largest stablecoin, its expansion trails Tether’s USDT. Circle’s reliance on interest income from USDC reserves exposes it to rate cycles and supply fluctuations amid ongoing regulatory scrutiny.
WOOFUN AI
Impact Assessment · Quick Read
The sharp downgrade highlights institutional concerns over stablecoin issuer profitability as yield-bearing alternatives gain traction. Competition from entities like BlackRock may erode USDC’s market share, pressuring Circle’s revenue model. Investors should monitor regulatory developments and USDC supply trends for further signals on sector health.
Generated by WOOFUN AI · For reference only, not investment advice
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