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USDC faces Open USD
Circle is facing rising pressure on USDC economics as Wall Street cuts its outlook, with Mizuho downgrading Circle to Underperform from Neutral and cutting its price target to $50 from $85.
“Mizuho downgrades Circle to underperform, cuts price target to $50 on Open USD threat The Japanese investment bank said Open USD's yield pass-through model could pressure Circle's margins by shifting more reserve income to distributors”
Mizuho said Open USD’s yield pass-through model could pressure Circle’s margins by shifting more reserve income to distributors, and it cut its Circle 2027 adjusted EBITDA forecast to $699 million, about 25% below Wall Street consensus.
The CoinDesk report tied the threat to Open USD’s model that “could fundamentally alter CRCL's business model,” which relies on retaining a large portion of the treasury yield to drive revenues.
Mizuho also warned that an upcoming Coinbase revenue-sharing renewal could add pressure, while Circle shares were trading 0.6% lower at $62.63 at publication time.
Circle pushes back
Circle President Heath Tarbert told Fox Business on Tuesday that the company is unfazed by emerging stablecoin competitors and remains focused on long-term growth, saying it is “playing the long game.”
Tarbert argued USDC’s scale, with roughly $73 billion in circulating supply and native presence across 34 blockchains, gives it a significant advantage even as competition intensifies.
He downplayed the threat from Open USD by saying large industry consortiums can be difficult to maintain over time, and he pointed to Circle’s own history beginning as a consortium before consolidating.
The TradingView report also noted that Circle’s stock had fallen from about $260 last June to around $62, a decline of roughly 76%, while Mizuho’s downgrade implied roughly 21% downside from the stock's last close.
Renewal deadline looms
Beyond the immediate downgrade cycle, the stakes for Circle’s USDC business model are tied to an August 18, 2026 expiration of Circle's crucial revenue-sharing agreement with Coinbase, which a separate options-focused report described as a critical test.
That same report framed the company’s situation as an “existential threat” from the recently launched Open USD, while also pointing to July 10, 2026 options activity where call options outnumbered puts by a 4:1 ratio.
Mizuho’s broader caution also emphasized that regulatory progress does not resolve core business pressures, warning that the OCC’s final green light for Circle’s First National Digital Currency Bank fails to address issues “that have been hurting the stock of recent.”
In the options report’s timeline, Cboe Options Exchange prepared to launch extended trading hours for select multi-listed equity options, including CRCL, on July 13, 2026, as traders positioned for significant price action.
