Wall Street is turning increasingly cautious on Circle, as analysts warn that pressure on the USDC economic model is intensifying

PANews July 15, according to a report by The Block, Wall Street analysts’ cautious sentiment toward Circle is intensifying. Mizuho downgraded Circle’s rating from neutral to underperform and cut its target price from $85 to $50, a decline of more than 41%. On the same day, JPMorgan lowered its profit expectations for Circle and Coinbase. Mizuho believes that Open USD is supported by more than 140 companies including Visa, Mastercard, Stripe, BlackRock, and Coinbase. It adopts a “look-through” model that allocates nearly all reserve earnings to distributors, which may force Circle to concede an even larger share of reserve earnings to remain competitive.

Mizuho also noted that Circle and Coinbase’s revenue-sharing agreement is set to be renewed next month. As an Open USD founding member, Coinbase may have greater leverage in the negotiations. JPMorgan cited Circle’s new agreement with Hyperliquid as an example, saying it reflects a competitive landscape in which Circle and Coinbase are forced to compete to offer the best possible revenue-sharing terms in order to retain partners. Bernstein and William Blair still hold a positive view of Circle, saying that its liquidity, regulatory first-mover advantage, and network effects are difficult to replicate.