Morgan Stanley Slashes Circle Price Target Amid USDC Growth Woes
Morgan Stanley downgraded Circle Internet Group (CRCL) to underweight and cut its price target to $38 from $106, citing concerns over slowing growth of Circle's flagship stablecoin, USDC.
The bank's analysts argue that the rise of tokenized money market funds has intensified competition for USDC, which is the second-largest stablecoin by market capitalization but has seen lagging growth in recent quarters compared to rivals like Tether's USDT.
Circle went public earlier this year through a special purpose acquisition company (SPAC) merger and its stock has been volatile since listing. The company derives most of its revenue from interest income on the reserves backing USDC, making it sensitive to both interest rate cycles and the growth of its stablecoin supply.