Key Points
- Mizuho downgraded Circle’s price target from $45 to $43 while maintaining its Underperform rating.
- Analysts project AI personal assistants pose a 10% to 20% threat to the company’s reserve income.
- Simulations show AI tools directing users toward FDIC-insured accounts and alternative crypto platforms.
- Rapid AI adoption could redirect as much as $9 billion away from USDC’s current market capitalization.
- The stock dropped 7% to close at $79.84 following Monday’s report.
Mizuho Securities has revised its outlook for Circle Internet Group, issuing a reduced price target for the USDC stablecoin issuer. The investment bank now projects shares will reach $43, a decrease from its previous $45 estimate.
The firm maintained its Underperform rating in Monday’s research note. Analysts highlighted growing concerns about artificial intelligence-powered financial advisors.
“We believe AI personal assistant engines pose a marked risk to Circle’s medium-term revenue,” the research team stated.
AI-Driven Disruption to Stablecoin Holdings
Mizuho’s analysis suggests that widespread adoption of AI financial assistants could reduce USDC’s total market capitalization by between $4 billion and $9 billion. This contraction would directly impact the interest income Circle generates from the reserves backing its stablecoin.
The bank estimates reserve revenue faces a medium-term decline of 10% to 20%. According to the research, AI agents are likely to direct USDC holders toward fiat products with superior yields or competing crypto services.
The investment bank conducted testing with multiple AI assistants, including one named Muse. These tools consistently steered users away from USDC toward FDIC-protected savings vehicles like those provided by SoFi.
When users expressed interest in maintaining crypto exposure, the AI systems still “seem to prefer other platforms” rather than Circle’s direct offerings, according to the report.
Current distribution data from the second quarter shows approximately 17% of USDC remains on Circle’s proprietary platform, where no interest accrues to holders. Roughly 30% sits on Coinbase, while the remaining 53% is distributed across various other services.
In an accelerated AI adoption scenario, Mizuho projects approximately $7 billion could migrate to traditional fiat instruments. An additional $2 billion might flow to competing stablecoins offering superior returns.
Combined, these shifts would reduce USDC’s overall market cap by as much as $9 billion. Under this scenario, Circle’s reserve income would decline by 18%.
Revised Financial Projections
The research team lowered its 2027 forecast for average USDC circulation to $101 billion from the previous $108 billion estimate. This adjustment reflects expectations of broader AI adoption.
The revision reduces projected reserve revenue by 5% to $4.1 billion, down from $4.3 billion. Mizuho also decreased its adjusted EBITDA projection by roughly 5%, from $635 million to $603 million.
Earlier this month, Circle disclosed approximately $1.4 billion in revenue for the first half of 2026. The company reported retaining about 7 cents in net profit per dollar of revenue.
USDC processed over $36 trillion in blockchain-based transactions during the period. By June, the stablecoin represented approximately 77% of worldwide stablecoin transaction volume, increasing from 60% the prior year, according to Circle’s Oct. 16 blog update.
Circle’s stock finished Monday’s session down 7% at $79.84. Mizuho’s $43 price target represents a potential 46% decline from that closing price.
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