Morgan Stanley downgraded Circle Internet Group (CRCL) to "underweight" from "equal weight" on Aug. 3 and cut its price target to $38 from $106, citing a contraction in USDC circulation and what it described as the company’s high sensitivity to reserve income. The bank also said Circle’s business mix is shifting toward transaction-driven revenue, which carries lower margins. In the same report, Morgan Stanley reduced its USDC scale forecasts for 2027 and 2028 by about 33% and 44%, respectively, and said it expects Circle’s GAAP earnings per share to come in about 3% and 20% below market consensus. At the same time, Morgan Stanley’s latest 13F filing showed that, as of June 30, it had increased its Circle holdings from about 1.46 million shares to 8.32 million shares, indicating a sizable buildup in the second quarter. The contrast has drawn attention because the public research call turned more cautious in early August, while the most recent historical holdings disclosure still showed a major increase in exposure. The 13F filing only reflects positions as of June 30 and does not show whether the firm changed its stake before or after the downgrade.
BlockBeats reported on Aug. 15 that Morgan Stanley downgraded Circle Internet Group (CRCL) to "underweight" from "equal weight" on Aug. 3 and sharply lowered its price target to $38 from $106.
According to the report, Morgan Stanley’s analysts tied the downgrade mainly to a contraction in USDC circulation, which they said highlights Circle’s strong sensitivity to reserve income. The bank also said the company’s business mix is shifting toward transaction revenue, a lower-margin model.
Morgan Stanley also cut its forecasts for Circle’s USDC scale in 2027 and 2028 by about 33% and 44%, respectively. It added that the company’s GAAP earnings per share are expected to come in about 3% and 20% below market consensus.
13F filing shows a large position increase
At the same time, Morgan Stanley’s latest 13F filing showed that as of June 30, it held about 8.32 million Circle shares, up from roughly 1.46 million shares. The filing points to a clear increase in the firm’s position during the second quarter.
That leaves a visible gap between Morgan Stanley’s public research stance and its historical holdings disclosure. In early August, the bank lowered its rating and target price on Circle, sending a more cautious signal. Yet its disclosed position at the end of the second quarter still showed a substantial increase in ownership.
The filing date matters here. A 13F only reflects holdings as of June 30, so it does not indicate whether Morgan Stanley adjusted its position before or after the Aug. 3 downgrade. For the market, the main point of focus is the contrast between the institution’s research view and the historical position data available in public filings.
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