Mizuho Downgrades Circle, Cuts Price Target Amid Open USD Competition

Mizuho downgraded Circle (CRCL) from neutral to underperform on July 14, 2026, reducing its price target from $85 to $50. This move comes amid increasing competition from Open USD, a new dollar-backed stablecoin introduced by the Open Standard consortium on June 30, 2026.

The investment bank highlighted that Open USD's yield pass-through model could significantly alter Circle's revenue dynamics. Analysts explained that this new model might compel Circle to share a greater portion of its reserve income with distribution partners, which would compress margins. Mizuho specifically noted that Circle's reliance on retaining substantial treasury yields for revenue could be jeopardized as Open USD gains traction.

Mizuho has adjusted its forecast for Circle's 2027 adjusted EBITDA to $699 million, approximately 25% below Wall Street's consensus estimate of $941 million. This revision also stems from anticipated pressures related to the upcoming renewal of Circle's revenue-sharing agreement with Coinbase, which is a key distribution partner for Circle. The analysts warned that Coinbase's support for Open USD could strengthen its negotiating position, complicating Circle's ability to maintain favorable terms.

Furthermore, Mizuho raised its estimates for Circle's distribution and transaction costs, signaling a potential future struggle to balance operating expenses against lower margins. The analysts believe higher reserve yields will not sufficiently counteract the pricing pressure stemming from competition.

In addition, concerns loom around additional industry pressures. A recent report from JPMorgan pointed out that partnerships like Hyperliquid's alliance with both Circle and Coinbase could create a challenging environment, dubbed a "prisoner's dilemma," affecting Circle's ability to optimize its earnings from the USDC stablecoin.

As Circle faces these multifaceted challenges, observers will need to monitor upcoming negotiations and developments in the competitive landscape surrounding stablecoins, particularly as new entrants like Open USD emerge and attempt to capture market share.