Morgan Stanley Downgrade Crushes Circle Internet Amid Bitcoin Slump and CLARITY Act Uncertainty

Crypto-linked equities took a hit in pre-market trade on Monday as Bitcoin's price slipped below $63,000.

The decline was led by Circle Internet (CRCL), with shares falling over 5% after Morgan Stanley downgraded the stock to 'Underweight' from 'Equal Weight' with a price target of $38.

Morgan Stanley analyst James Faucette warned that Circle's USDC revenue model faces pressure due to slower growth in USD Coin circulation, which could lead to lower margins and reduced transaction revenue.

The CLARITY Act uncertainty also weighed on CRCL stock as the Senate did not include the legislation in its agenda for this week, leaving its fate uncertain ahead of the chamber's recess starting August 10.