Morgan Stanley downgraded Circle from equal-weight to underweight and slashed its price target from $106 to $38. The bank also cut its USDC supply forecasts by roughly 33% for 2027 and 44% for 2028, anticipating a significant contraction in the stablecoin supply that directly threatens the company’s business model relying on interest generated by reserves. Circle shares dropped nearly 4% on the news, bringing year-to-date losses to approximately 30%. The company, which priced its IPO at $31 in June 2025 with an opening price of around $69, is facing growing skepticism from major investment banks.
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