Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
On August 5, Beijing time, stablecoin issuer Circle (CRCL) will release its latest quarterly earnings before the U.S. market opens; however, just ahead of this earnings report, Wall Street has already shown clear分歧 over Circle’s future value.
On August 3, Morgan Stanley (hereinafter referred to as "Morgan Stanley") downgraded Circle's rating from "Equal Weight" to "Underweight" and significantly reduced its target price from $106 to $38.
Meanwhile, TD Cowen initiated coverage of Circle with a “Buy” rating and set a price target of $82.
Two institutions have issued vastly different ratings, and the core disagreement behind them lies in how to define Circle today—whether to view it as a stablecoin issuer still reliant on the growth of USDC, or as a technology company evolving into a digital financial infrastructure platform.
Institutional divergence: Morgan Stanley is bearish on USDC growth, while TD Cowen bets on platform transformation.
The analyst at Morgan Stanley who gave a "Reduce" rating is James Faucette. On TipRanks, Faucette has a four-star rating (out of five), and he is widely regarded as a sell-side analyst well above average, despite an average return of only 3.1% over the past two years, with a high win rate of 60%.
Faucette's bearish thesis centers on Circle's current revenue model.
In its view, the market may have overestimated the future growth potential of USDC, and the pace of expansion in stablecoin use cases has been slower than previously anticipated—since the third quarter of 2025, the circulating supply of USDC has not actually grown, and apart from remittances and card payments linked to stablecoins, no large-scale new use cases for USDC have emerged yet.
This means that Circle’s current core revenue source—reserve income—may face growth pressure. Currently, Circle’s primary revenue heavily relies on deploying USDC reserve assets into cash and short-term U.S. Treasury securities to generate interest income; thus, growth in USDC’s circulating supply is often seen as a key driver of the company’s profit expansion.
Faucette believes that if the growth of USDC slows, Circle’s future revenue mix may gradually shift toward lower-margin transaction income. Based on this assessment, he expects Circle’s future profitability to fall below market expectations and believes the current valuation already reflects overly optimistic growth assumptions.
Another analyst with a view similar to Faucette’s bearish stance is Dan Dolev from Mizuho Securities. Dolev has a 4.5-star rating on TipRanks, higher than Faucette’s, and last Friday maintained a “Hold” rating on Circle while lowering his price target from $50 to $45.
At TD Cowen, analyst Bryan C. Bergin has issued a "Buy" rating; however, on TipRanks, Bergin’s personal performance rating is only half a star, with a historical average return of -3.4% and a win rate of just 43%.
Bergin believes the market may currently be underestimating Circle’s potential to transition from a stablecoin issuer to a broader financial infrastructure platform.
In its analytical framework, Circle's future value does not depend solely on the circulating supply of USDC, but on its ability to build a more comprehensive financial services ecosystem around stablecoins, including payments, fund management, real-world asset (RWA) tokenization, developer services, and blockchain infrastructure.
Bergin expects USDC's circulating supply to maintain a compound annual growth rate of approximately 31% by 2030, while fee-based revenue is projected to grow significantly faster than traditional reserve income. Additionally, Circle’s Arc network, currently under development, could serve as a potential growth catalyst, further expanding Circle’s influence in the digital financial infrastructure space.
Another key recent variable: the progress of the CLARITY Act
In addition to the company’s own business model, regulatory developments are a key factor currently influencing market expectations for Circle.
Previously, the market widely viewed the CLARITY Act as a key catalyst for further development in the stablecoin industry—if ultimately enacted, the bill would provide a clearer regulatory framework for stablecoin issuance, trading, and related financial services, potentially reducing compliance uncertainty for institutional adoption of stablecoins.
However, at present, the progress of the CLARITY Act is not going smoothly. With only a few working days remaining before the Senate’s summer recess, market expectations for its swift passage have clearly declined.
- Odaily Note: Refer to “Just One Step Away—Where Is the CLARITY Bill Stuck?”; “What If the CLARITY Bill Ultimately Fails to Pass?”
If the progress of this bill continues to be delayed, the market may reassess the pace of commercialization in the stablecoin industry and expectations for Circle’s growth. Therefore, prior to the earnings announcement, the uncertainty surrounding the CLARITY bill has become one of the key factors suppressing market sentiment for CRCL.
Earnings report coming soon; market awaits answers from Circle
Ultimately, Wall Street’s divergence on Circle stems not from short-term performance, but from differing views on the company’s future positioning. Bears question whether Circle’s traditional reserve income model can sustain its current valuation after USDC growth slows, while bulls bet that Circle will leverage its stablecoin business to gradually evolve into a digital financial infrastructure platform.
Therefore, in this earnings report, in addition to revenue and profit performance, the market will also closely monitor reserve income (particularly distribution agreements with Coinbase and other partners), as well as progress in payments, RWA, and other businesses.
After tomorrow evening’s earnings report, Odaily Planet Daily will also provide immediate analysis for you.