Mizuho Downgrade Circle by 41% as USDC Economics Come Under Pressure

According to The Block reporting on analyst research, Mizuho downgraded Circle (CRCL) to Underperform from Neutral on July 14 and slashed its price target by 41% to $50 from $85, citing concerns that USDC economics face mounting pressure. On the same day, JPMorgan also lowered earnings estimates for Circle and Coinbase, pointing to similar strains on USDC's economic model.

Mizuho analyst Dan Dolev identified the primary threat as Open USD, a newly launched dollar-backed stablecoin backed by over 140 financial, tech and crypto companies including Visa, Stripe, and BlackRock. Unlike Circle's revenue-sharing model where it retains roughly 38% of reserve income, Open USD routes nearly all reserve yield to distributors. Mizuho warned this competitive pressure could force Circle to concede a larger share of reserve income to retain partners.