LATEST: Morgan Stanley downgraded Circle to Underweight and slashed its price target to $38 from $106, citing slower USDC growth and pressure on reserve income.

What happened

Morgan Stanley downgraded Circle to Underweight and cut its price target from $106 to $38, saying USDC growth is slower and reserve income is under pressure.

Confirmed

Global impact / market context

The downgrade highlights worries about Circle’s stablecoin revenue, which could lower investor confidence, reduce funding for USDC projects, and limit the token’s ecosystem growth.

Analyst inference

Stablecoins are under regulatory scrutiny, and slower USDC adoption may push capital toward other digital assets, shaping overall crypto market dynamics.

Analyst inference

What to watch

1. Circle’s USDC issuance growth rates – continued lag could keep revenue pressured and affect earnings. Analyst inference
2. Regulatory actions on stablecoin reserves – stricter rules may raise compliance costs and squeeze profitability. Analyst inference
3. Morgan Stanley’s future analyst coverage – any further rating changes could move investor sentiment and the stock price. Analyst inference

Affected assets

• USDC — USD Coin

Evidence

• x.com