Mizuho cuts Circle price target to $43 on AI-driven yield competition
Mizuho Securities reduced its price target on Circle Internet Group to $43 from $45 and maintained an Underperform rating, warning that AI personal-assistant tools could prompt users to shift funds away from USDC into higher-yielding alternatives.
Mizuho Securities lowered its price target on Circle Internet Group (CRCL) to $43 from $45 while reiterating an Underperform rating, according to an analyst note reported by Unchained and The Block. The brokerage warned that AI personal assistants that seek out optimal yields could pose a 10% to 20% medium-term downside risk to Circle's reserve revenue and erase between $4 billion and $9 billion of USDC's market value.[1][2][3]
In testing AI tools including Muse, Mizuho found that the assistants steered users toward higher-yielding, FDIC-insured fiat accounts rather than USDC. Even when instructed that a user preferred to remain in crypto, the bots showed a preference for alternative platforms over Circle's. Under an accelerated adoption scenario, Mizuho estimates roughly $7 billion could shift to fiat options and $2 billion into higher-yielding stablecoins, cutting Circle's reserve revenue by 18%.[1]
Accounting for wider AI adoption, Mizuho revised its 2027 projections, cutting its expected average USDC supply to $101 billion from $108 billion and reducing projected reserve revenue to $4.1 billion from $4.3 billion. Reserve earnings remain Circle's primary business driver; the firm reported $668 million in reserve income in the second quarter, representing roughly 95% of its $701 million in total revenue, with $73.3 billion of USDC outstanding.[1]
Mizuho's stance contrasts sharply with Bernstein, which raised its Circle target to $145 from $140 on the same day while keeping an Outperform rating. Circle shares dropped 7.1% to $79.84 on Monday before rebounding 2.2% on Tuesday to close at $81.57. Circle is scheduled to report its third-quarter financial results on Nov. 4 before markets open.[1]
Key facts
- Mizuho cut its Circle price target to $43 from $45 and reiterated an Underperform rating on CRCL.
- Mizuho warned of a 10% to 20% medium-term reserve revenue risk, estimating AI tools could erase $4 billion to $9 billion in USDC market value by steering users to higher-yielding products.
- In a faster AI adoption model, Mizuho projects $7 billion moving to fiat and $2 billion moving to higher-yielding stablecoins, reducing reserve revenue by 18%.
- Mizuho lowered its 2027 forecast for average USDC supply to $101 billion from $108 billion and reserve revenue to $4.1 billion from $4.3 billion.
- Reserve income accounted for $668 million of Circle's $701 million total revenue in the second quarter, when USDC circulation stood at $73.3 billion.
- Bernstein raised its Circle price target to $145 from $140 on the same day, reiterating an Outperform rating.
- Circle shares closed Tuesday at $81.57, about 47% above Mizuho's $43 target, ahead of third-quarter earnings scheduled for Nov. 4.
Sources · 3 sources
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UnchainedArticle ·
Chatbots Would Rather You Skip USDC, Mizuho Finds, Cutting Circle Target to $43 Mizuho thinks AI assistants that shop around for yield on behalf of their users could become a real drag on Circle’s business. Mizuho Securities on Monday trimmed its Circle Internet Group (CRCL) price target by $2, to $43 , while reiterating an Underperform rating. In the note, the bank estimated that AI personal-assistant tools pulling holders out of USDC and into better-paying products could cut Circle’s reserve revenue by 10% to 20% over the medium term and erase $4 billion to $9 billion of USDC’s market value. “We believe AI personal assistant engines pose a marked risk to Circle’s medium-term revenue,” Mizuho analysts wrote . Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . Inside Mizuho’s Chatbot Test Mizuho put the question to AI agents, Muse among them: where should someone keep their cash? The assistants tended to steer away from USDC and toward FDIC-insured accounts with higher yields. Told the user preferred to stay in crypto, the agents still “seem to prefer other platforms” to Circle’s, the note said . Mizuho’s exercise shows advice, not withdrawals. In a faster-adoption scenario, Mizuho sees roughly $7 billion shifting to fiat products and about $2 billion to stablecoins that pay more, which would lower reserve revenue by 18%. Assuming wider AI adoption, Mizuho now models USDC supply averaging $101 billion in 2027, down from the $108 billion it projected before, and expects 2027 reserve revenue of $4.1 billion, $200 million below its earlier $4.3 billion call. Mizuho’s breakdown of where USDC lived at the end of the second quarter: roughly 30% on Coinbase, 53% on other venues, and about 17% on Circle’s own platform, which pays holders nothing. Why Reserve Income Matters Interest on the cash and Treasuries backing USDC makes up nearly all of Circle’s sales. The company reported $668 million of reserve income for the second quarter, about 95% of its $701 million in total revenue and reserve income, with $73.3 billion of USDC outstanding at quarter end. Earlier this month, Circle said about 59 cents of each first-half revenue dollar went to USDC partners and transaction costs. Rival dollar tokens have rattled the stock before. Bernstein took the other side on the same day, raising its Circle target to $145 from $140 and keeping an Outperform rating. Circle shares fell 7.1% on Monday to $79.84 as crypto stocks broadly slid, with Coinbase down nearly 3%, then gained 2.2% on Tuesday to close at $81.57 . Mizuho’s $43 target sits about 47% below Tuesday’s close. Circle is scheduled to report third-quarter results on Nov. 4 before the market opens. Related Listen: Why Agents Will Ditch Stablecoins That Don’t Pay Yield: Bits + Bips The post Chatbots Would Rather You Skip USDC, Mizuho Finds, Cutting Circle Target to $43 appeared first on Unchained .
Open source - TB
The BlockArticle ·
Circle faces up to 20% revenue risk from AI agents, Mizuho says Mizuho cited 10-20% medium-term reserve revenue downside risk as AI agents steer USDC holders toward higher-yielding fiat alternatives.
Open source - TB
The Block@TheBlockCoPost on X ·
THE BLOCK: Mizuho has cut Circle's price target to $43 from $45 and maintained an Underperform rating on the $CRCL stock. It cited 10-20% medium-term reserve revenue downside risk as AI agents steer USDC holders toward higher-yielding fiat alternatives or other platforms. https://t.co/TUGYxeKxS4
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