Mizuho Downgrades Circle to 'Underperform' as Open USD Threat Looms

Japanese investment giant Mizuho has downgraded Circle to 'underperform,' slashing its price target to $50 in response to emerging competitive pressures. The downgrade highlights a significant shift in the stablecoin landscape, specifically targeting the potential impact of the Open USD model on Circle's financial outlook.

Analysts warn that Open USD's yield pass-through model poses a direct threat to Circle's margins by shifting more reserve income toward distributors. This structural shift could erode the profitability of traditional stablecoin issuers, forcing a reevaluation of Circle's market position and long-term revenue stability in an evolving regulatory and competitive environment.

Mizuho, the Japanese investment bank, has downgraded Circle to 'underperform' and cut its price target to $50, citing the threat posed by Open USD. The bank noted that Open USD's yield pass-through model could heavily pressure Circle's margins by shifting a larger portion of reserve income to distributors, potentially disrupting Circle's established revenue streams.