Morgan Stanley Downgrades Circle Amid USDC Growth Concerns

Morgan Stanley has downgraded Circle Internet Group (CRCL) to underweight and cut its price target to $38, citing concerns over slowing growth of the company's flagship stablecoin, USDC.

The bank's analysts argue that slower USDC adoption and increasing competition from tokenized money market funds could pressure Circle's fee revenue and market share in the rapidly evolving digital asset landscape.

USDC is the second-largest stablecoin by market capitalization, but its growth has lagged behind rivals like Tether's USDT in recent quarters.

The rise of tokenized money market funds, such as those offered by BlackRock and Franklin Templeton, has created a new competitive front that could divert liquidity away from stablecoins.