BlockBeats News, July 19th, according to Bloomberg, Circle's stock price has dropped over 75% from its peak after last year's IPO. Mizuho Securities USA analyst Dan Dolev downgraded Circle's rating from "Neutral" to "Underperform the Market" this week and set a Wall Street lowest target price of $50, representing about an 18% downside from Thursday's closing price, much lower than the Bloomberg-compiled analyst average target price of $123.

Dolev believes that Circle is facing increased stablecoin competition. Over 100 fintech firms, payment networks, crypto companies, and banks, including Visa, Stripe, Coinbase, and BlackRock, are backing the Open Standard project, which will issue OUSD. Circle's stock fell 7.7% on Thursday, the same day Visa announced a stablecoin issuance, transfer, and management platform for financial institutions.

Circle mainly generates revenue through the interest on USDC reserve assets, while new stablecoin initiatives like OUSD share reserve revenue with partners and charge lower management fees. Dolev thinks this business model may attract partners away from Circle, intensifying pricing and margin pressure.

Dolev expects Circle's 2027 adjusted EBITDA to be $699 million, below the market's consensus expectation of $907 million. He also noted that Circle's USDC distribution agreement with Coinbase will be renegotiated in August, with Coinbase potentially seeking a higher revenue split leveraging the competitive pressure from OUSD.