Circle Internet Group (CRCL) drew bearish calls from both Mizuho and JPMorgan on July 14, with the stock falling 3.68% in early trading to $60.68.
Mizuho analyst Dan Dolev downgraded Circle from neutral to underperform and cut his price target to $50 from $85, implying about 21% downside. JPMorgan analyst Kenneth Worthington, in a separate note, said Hyperliquid’s rise is eating into the economics of USDC and is pushing Circle and Coinbase toward what he described as a prisoner’s dilemma.
Mizuho points to Open USD as a structural threat
Mizuho tied its downgrade to Open USD (OUSD), a dollar stablecoin launched by Open Standard on June 30. The report said the project is backed by more than 140 institutions, including Mastercard, Stripe, Coinbase and BlackRock.
According to Dolev, Open USD uses a pass-through revenue-sharing model that sends reserve income directly to issuance and distribution channels. He also said the structure is expected to align with compliance requirements under the proposed U.S. GENIUS Act. In Mizuho’s view, that setup directly challenges Circle’s existing model of retaining most reserve income as revenue.
Based on that assessment, Mizuho raised its assumption for Circle’s fiscal 2027 revenue-sharing and transaction cost ratio to 73% from 64%. It also cut adjusted EBITDA estimates to $699 million from $1.093 billion.
JPMorgan says Hyperliquid is reshaping USDC economics
Worthington approached the issue through supply concentration and revenue-sharing changes. He said Hyperliquid currently holds about $6 billion in USDC, equal to roughly 8% of circulating supply. July trading volume on the platform exceeded $150 billion, or 11.5% of Binance’s volume.
The report also referenced a July 14 Chain News article on Hyperliquid’s HIP-3 and its six-month shift to 50% of perpetual futures trading volume. That rise in activity was described as part of the backdrop for JPMorgan’s latest warning.
JPMorgan said the key issue is a change in how reserve income is split. Under Hyperliquid’s new arrangement, Coinbase classifies the USDC it holds as on-platform, allowing it to keep reserve income directly and then pass 90% of that income to Hyperliquid. The bank said that marks a significant departure from Coinbase’s earlier model with Circle, where revenue sharing was close to an even split.
Worthington lowered profit forecasts for both Circle and Coinbase and said, “This change at Hyperliquid is pushing the Circle-Coinbase partnership toward a prisoner’s dilemma, with the two firms competing even as they promote USDC circulation.”
USDC supply has declined since March
JPMorgan also noted that USDC circulating supply has fallen from about $80 billion in March to $73 billion now, a move the bank cited as another sign of pressure on Circle.