Morgan Stanley Cuts Circle Price Target to $38 on Slower USDC Growth
The rating change sent shares of Circle Internet lower, according to CoinDesk reporting on the downgrade.
Morgan Stanley cut its Circle price target to $38 and downgraded the stablecoin issuer to underweight, pointing to slower USDC growth as the reason behind its more cautious near-term view on the stock.
The rating change sent shares of Circle Internet lower, according to CoinDesk reporting on the downgrade. Circle trades on the public market under the ticker CRCL, CRCL, giving equity investors direct exposure to the performance of its USD Coin franchise.
KEY POINTS
- Morgan Stanley downgraded Circle to underweight.
- The bank cut its price target on the stock to $38.
- The call cites slower USDC growth as the core reason.
Morgan Stanley Downgrades Circle and Cuts Its Price Target
The move lowers Morgan Stanley’s rating on Circle to underweight, its most bearish tier, and pairs the downgrade with the reduced $38 target. Analyst rating changes carry added weight for crypto-linked equities, where a company’s fortunes are tied closely to the growth of a single digital asset. For related coverage, see Michael Saylor Says He Has Never Sold Bitcoin, Keeps Long-Term View.
For Circle, that asset is USDC. Rating shifts on such stocks often move sentiment quickly, as seen when other banks recalibrate crypto exposure; Citi, for example, recently cut its Bitcoin and Ether targets on softer flows. For related coverage, see BitMine Acquires 10,399 ETH, Holdings Reach 5.8M ETH.
Why Slower USDC Growth Is Driving the Bearish View
Morgan Stanley’s downgrade rests on slower USDC growth, the main reason the bank gave for trimming its target. Because USDC issuance drives Circle’s reserve income, decelerating supply growth weighs directly on the company’s near-term revenue narrative.
That dynamic shapes how investors read Circle’s outlook. Weaker momentum in stablecoin supply reduces the pace of expansion the market had priced in, pressuring sentiment even as institutions continue building around the sector, such as BlackRock’s move to launch tokenized funds for stablecoin reserves.
Circle continues to expand its regulatory footprint, having been granted a trust charter by the New York Department of Financial Services. The USDC issuer also sits alongside broader institutional crypto activity from the same bank, which through its asset-management arm has launched Ether and Solana ETPs with staking.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
