Crypto

Morgan Stanley Downgrades Circle to Underweight Over Slowing USDC Growth

Guavy AI Editorial Team Published August 3, 2026

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USDT USDC

Morgan Stanley's analysts have downgraded Circle Internet Group (CRCL) to underweight and cut its price target to $38 from $106. This move sent CRCL shares plummeting by around 6% in early trading.

The downgrade is due to concerns over slowing growth of Circle's flagship stablecoin, USDC, and increasing competition from tokenized money market funds. According to Morgan Stanley analysts, these factors could pressure Circle's fee revenue and market share in the rapidly evolving digital asset landscape.

USDC is currently 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 also created a new competitive front, potentially diverting liquidity away from stablecoins.

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