Bernstein has lowered its price target for Circle (CRCL) to $140 from $190, indicating a significant upside potential despite challenges from the newly launched Open USD consortium. This reassessment, led by analyst Gautam Chhugani, underscores the belief that the threat posed by Open USD is less substantial than market sentiment suggests. The adjustment arrives as Circle faces a broadly stable outlook for its stablecoin, USDC, which saw its supply dip from $77 billion in Q1 to approximately $73 billion by the end of Q2 2026.
Background & Context
Circle, the issuer of the USDC stablecoin, has been navigating a complex market environment characterized by increasing competition and evolving regulatory frameworks. The launch of Open USD—a consortium backed by major financial players such as Visa, Mastercard, and Stripe—initially raised concerns about USDC’s market share. However, Bernstein’s analysis points to the reality that Circle continues to engage meaningfully with these industry giants through various memorandums of understanding, suggesting that concerns regarding Open USD may be overstated.
Despite the reduction in supply, average USDC supply per quarter modestly increased to about $76 billion. This indicates a resilient demand for USDC, which remains a prominent player in the stablecoin market. Investors are closely watching how Circle adapts to these shifting dynamics while maintaining its competitive edge.
Market Impact & Analysis of Circle Price Target Update 2026
The reduction of Circle’s price target to $140, still representing a robust 118% upside from the recent closing price of $64.32, highlights the firm’s long-term growth potential. Bernstein’s valuation method, based on discounted cash flow, suggests that despite short-term fluctuations, the fundamentals of Circle remain strong. Analysts predict that Circle will maintain a significant share of the stablecoin market, potentially capturing 30% of a projected $4 trillion stablecoin market by 2035.
Circle’s revenue model, which is inherently hedged against interest rate fluctuations, remained stable with reserve income reaching approximately $655 million—slightly up from the previous quarter. The partnership with Hyperliquid, where USDC serves as the primary quoted asset, has proven beneficial, with USDC balances on the platform climbing significantly, generating an estimated $210 million in annualized gross reserve income.
Expert Perspective on Circle’s Future
Industry experts note that the competition presented by Open USD may not lead to a significant erosion of Circle’s market position. The consortium lacks formal commitments from key players, as indicated by recent comments from a Samsung official, and Visa’s stance of remaining multi-coin and multi-chain indicates a diversified approach rather than a single winner mentality. This signals that Circle’s established regulatory framework and broad acceptance in the crypto ecosystem may continue to serve it well.
What This Means for Investors
For investors, the lowered price target coupled with a strong upside potential affirms the viability of Circle as a long-term investment. As the stablecoin market evolves, monitoring regulatory developments and partnerships will be crucial in gauging Circle’s performance. With a solid foundation and growth strategies in place, investors could view this as an opportune moment to reassess their positions in Circle.
Key Takeaways
- Circle’s price target has been adjusted to $140, suggesting significant upside potential.
- USDC’s supply remains resilient despite market competition.
- Partnerships with major financial players indicate ongoing strong demand for USDC.
- Regulatory advancements, including Circle’s status as a federally regulated trust bank, bolster investor confidence.
- The overall stablecoin market is projected to reach $4 trillion by 2035, with Circle aiming for a 30% market share.
