ChainCatcher report, according to Wall St Engine, Morgan Stanley analyst James Faucette downgraded Circle (CRCL) from Equalweight to Underweight, reducing the price target from $106 to $38. Faucette noted that the contraction in USDC’s scale has exposed Circle’s reserve income sensitivity, implying a shift in revenue structure toward lower-margin transaction revenue. The firm has reduced its assumptions for USDC scale by approximately 33% in 2027 and 44% in 2028, resulting in GAAP EPS estimates that are about 3% and 20% below market consensus, respectively. Tokenized money market funds and deposits pose a threat to USDC balances and fee rates, with USYC’s economics structurally weaker; agentic payments remain negligible, with average daily trading volume at just $41,900, implying an average transaction size of approximately $0.24. Open USD introduces a shared governance and reserve economic model, increasing the cost of maintaining USDC distribution.
Morgan Stanley lowers CRCL price target to $38 from $106
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Summary
Morgan Stanley lowered its price target for CRCL to $38 from $106 and downgraded the stock to Underweight. The firm cited a shrinking USDC scale, which has negatively impacted Circle’s reserve income and shifted revenue toward lower-margin transactions. Forecasts for USDC growth in 2027 and 2028 were reduced by 33% and 44%, respectively, pushing GAAP EPS 3% and 20% below consensus estimates. Agentic payments remain weak, with daily volume averaging just $41,900. Investors monitoring altcoins to watch may observe crypto price movements as USDC faces pressure from tokenized money market funds.
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