Morgan Stanley Cuts Circle Target to $38, Sees USDC Squeezed by Tokenized Alternatives

Circle shares fell roughly 6% on Monday after Morgan Stanley downgraded the stablecoin issuer to underweight and slashed its price target to $38—a 64% cut from the previous $106, according to the original report.

The move reflects a sharp reassessment of Circle’s earnings power, not just a minor numbers tweak.

For a company whose core product revolves around a dollar-pegged digital asset, the bank’s call signals that the stablecoin business model is facing structural headwinds that extend far beyond this quarter’s volumes.

Reserve Yield Pressure Meets Slower Growth The downgrade wasn’t a simple reaction to a bad week in crypto markets.