Morgan Stanley Slashes Circle Stock Price Target, Downgrades to Sell

Circle stock plummeted to $58.67 in pre-market trading on August 3 after Morgan Stanley downgraded it from 'equal weight' to 'underweight' and slashed its price target.

The decision comes as Circle and other cryptocurrency stocks continue to experience losses following Bitcoin's price decline and broader market volatility.

Morgan Stanley analyst James Faucette cited competition and reduced transaction revenue as reasons for the downgrade, pointing out that USDC contraction exposes reserve income sensitivity and points to a lower-margin shift toward transaction revenue.

Faucette also mentioned Open USD (OUSD), a new stablecoin competitor backed by leading fintech and crypto firms such as BlackRock, Visa, Mastercard, and Coinbase.