- Mizuho Securities analyst Dan Dolev cut Circle Internet Group to underperform from neutral and issued a Street-low price target of $50 — implying approximately 18% further downside from Thursday’s close and sitting far below the $123 average analyst target; Dolev argues that the rest of the Street has not yet adequately modeled the competitive threat from Open Standard, the stablecoin consortium backed by more than 100 financial-technology companies, payment networks, crypto firms, and banks including Visa, Stripe, Coinbase, and BlackRock; his 2027 adjusted EBITDA estimate for Circle of $699 million is 23% below the $907 million consensus, with the gap explained almost entirely by competitive pricing pressure on USDC economics as Open USD proliferates.
- Circle’s stock trajectory tells the story of a company caught in the crossfire of the competitive dynamics it helped create: shares jumped 750% in the weeks after Circle’s June 2025 IPO as enthusiasm around the GENIUS Act stablecoin legislation made USDC’s issuer-keeps-the-yield model appear durable and defensible; shares have since fallen more than 75% from their post-IPO peak as Open USD and competing stablecoins entered the market with a fundamentally different economic model — sharing nearly all reserve income with distribution partners rather than retaining it — and fell another 7.7% on Thursday alone after Visa launched the Visa Stablecoin Platform, which is designed to distribute Open USD to institutional clients at scale.
- The August Coinbase re-negotiation is the most immediate near-term risk: Dolev says that with Circle under competitive pressure from Open USD, Coinbase — which currently shares USDC reserve income with Circle but is also a member of the Open Standard consortium — will use the renewal as leverage to extract a larger cut of USDC economics from Circle; “Because Circle is under pressure now with OUSD, Coinbase might use this as a lever to get an even better deal to maybe get a bigger cut of the economics. That bites into the profitability of Circle,” Dolev said. The re-negotiation arrives at the worst possible moment — when Circle’s bargaining position is weakest and Coinbase’s alternatives are most credible.
- Circle is not defenseless: the company recently received OCC approval to become a limited-purpose national trust bank, a regulatory designation that could differentiate USDC as the institutional-grade, bank-regulated stablecoin versus competitors that lack equivalent regulatory oversight; and USDC remains the second-largest stablecoin globally by market cap behind only Tether’s USDT, with deep integration across DeFi protocols, payment platforms, and institutional workflows that create real switching costs; but the structural shift in stablecoin economics toward distribution-partner yield sharing — driven by Open USD and now supercharged by Visa’s platform — is a fundamental threat to Circle’s core revenue model that OCC approval alone cannot neutralize.
What Happened?
Mizuho analyst Dan Dolev issued a Street-low $50 price target on Circle Internet Group with an underperform rating, warning that the competitive threat from Open USD and the 100+ companies backing Open Standard has not been adequately priced into consensus models. Circle shares fell 7.7% Thursday after Visa launched a stablecoin platform anchored to Open USD, and are now down more than 75% from their post-IPO peak. Dolev’s 2027 EBITDA estimate of $699 million is 23% below the $907 million Street consensus. A key Circle-Coinbase distribution deal re-negotiation is due in August.
Why It Matters?
Dolev’s call crystallizes the bear case on Circle that has been building for months: the company went public as the dominant regulated stablecoin issuer with what appeared to be a durable yield-on-reserves business model; it now faces a coordinated competitive assault from 100+ companies — including its own distribution partner Coinbase — that are building an alternative stablecoin designed specifically to eliminate the economic model that Circle’s business depends on. If Open USD achieves meaningful adoption, it doesn’t just compete with USDC for volume — it forces Circle to either match Open USD’s near-full yield sharing (destroying its own margin) or lose distribution to competitors offering better economics.
What’s Next?
Watch the August Coinbase re-negotiation closely — its terms will be a direct read on how much Circle’s bargaining power has eroded and how much of its USDC economics it must surrender to maintain its primary distribution relationship. Also watch Open USD’s beta launch metrics from the Visa Stablecoin Platform: if institutional adoption accelerates quickly, it will validate Dolev’s concern that the Street’s consensus models are too optimistic and could trigger a wave of downgrades toward his $50 target level. Circle’s response to the competitive pressure — whether through pricing, regulatory differentiation, or new product offerings — will be the critical variable to monitor over the next two quarters.
Source: Bloomberg
