Suh-ho from the Japan Investment Bank (JIB) has downgraded the price of the stabilizer, Circle, and has significantly reduced the target price. According to the bank, the OpenUSD, launched at the end of June, is changing the way in which the revenue distribution in the stable currency sector is distributed, which will directly reduce the profit margin of Circle's reliance on USDC reserve earnings.

Target price reduced to $50

Shigeo downgraded the Circe rating from “neutral” to “run-out” and the target price dropped from $85 to $50. Analysts point out that OpenUSD models are significantly different from USDC models. Circe first obtains the proceeds of the reserve assets and then distributes a portion of them to partners such as Coinbase and Binance, while OpenUSD only collects a lower operating fee and returns most of the proceeds of the reserve to the issuer and distributor.

In Seo ' s view, such a model, if accepted by the market, could weaken the ability of Circle to retain the bulk of the national debt gains to drive income. The report also mentions that Coinbase ' s involvement in supporting OpenUSD may give it a greater bargaining power in future negotiations with Circle ' s share of income.

The year 2027 profits are expected to be reduced.

On the basis of the above-mentioned judgement, Seo-ho increased the estimated distribution and transaction costs of Circle 2027 to 73 per cent as compared to 64 per cent previously. At the same time, the Bank's 2027 adjustment-adjusted EBITDA is expected to be revised downwards from $1.09 billion to $699 million, about 25 per cent below the market-consistent projection of $941 million.

  • Ratings: from neutral down to big game
  • Target price: from $85 to $50
  • EBITDA projection: $699 million

Seo-ho stated that even if the level of interest rates in 2027 was higher than previously forecast, the higher reserve returns would not be sufficient to offset the price-fixing pressures of competition.

USDC Supply has recently fallen

The report also mentions that the growth of the USDC has slowed in recent months and that the volume of traffic has dropped from nearly $80 billion in March to about $73 billion. At the same time, since May, the overall size of the stable currency market has shrunk by about $10 billion, owing to the weakening of encrypted transactions and more regulated issuers competing.

In addition to OpenUSD, Circle faces other pressures. A study released on the same day by Morgan Chase also noted that Hyperliquid ' s partnership with Circle and Coinbase was creating new pressure on the profitability of USDC.

As a whole, Wall Street agencies are beginning to reassess the revenue structure of stable currency distributors. With the change in the pattern of distribution of reserve income, the future profitability of Circle and cooperative sharing arrangements became the focus of market attention.